From Zero Hedge:
Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled and thus most lent to bank.
Having been thus exposed, many speculated that going forward the U.S. central bank would primarily focus its "rescue" efforts on U.S. banks, not U.S.-based (or local) branches of foreign (read European) banks. After all, that's what the ECB is for, while the Fed's role is to stimulate U.S. employment and to keep U.S. inflation modest.
And furthermore, should the ECB need to bail out its banks, it could simply do what the Fed does, and monetize debt, thus boosting its assets, while concurrently expanding its excess reserves thus generating fungible capital which would go to European banks.
Below we present that not only has the Fed's bailout of foreign banks not terminated with the drop in discount window borrowings or the unwind of the Primary Dealer Credit Facility, but that...
Read full article...
More on quantitative easing:
"Stealth QE3" is already here
New evidence shows the Fed's "QE2" was an utter failure
Porter Stansberry: The terrible reason stocks are soaring now