NormasArk = www.normasark.blogspot.com/

So many comments have come in that I have put a small sampling atop of the article. Ruby*o*
Anonymous said...
AMERICA IS DYING FROM INTERNAL CORRUPTION! All the futile wars are to cover up how corrupted the ever-growing-government and big businesses really are. They sleep in bed together. The American tax-payers are the biggest fools in the world for allowing it.
How tragic for a once great and independent nation! Just ask yourself the following question???
When was the last time The USA won a war after World War Two?
anon
"I do not care if the president is polka-dotted Chartreuse, just get us back to a balanced budget and out of these moronic wars so people can work and earn a living here in this land. Shipping out all our jobs is only one part of the corrupted thinking. I recall back in the early-to-mid-80's being told by many high ranking bankers that they were already shipping out 35% of all their jobs. The real numbers of lost American paid jobs today, would probably cause us all to have coronaries."
anon
The American public has been in the process of getting "dumbed down" since the thirties. History is no longer taught and we are doomed to become (or are we already) mediocre. Those who fail to study history are doomed to repeat it. Just look at the local politics. After the last election, someone wrote that Sarah Palin was just one of us and that was not what we needed and that she should go on home. We needed the brilliance that we have now in the current administration. Well that brilliance has continued the trend toward bankruptcy. I do not care which party a person claims, the corruption runs so deep now that we may never be able to cleanse our country. We are supposed to be a government "of the people, by the people, for the people". Perhaps we should be looking at the "Of the people" part carefully in the future. I am not necessarily advocating Ms Palin, but I would shy clear of anyone who has a silver tongue.
A currently unemployed US citizen who has had enough!! anon

Islamic Sharia Law Muslims in America. Our Muslim President. Ignorant Liberals. Dumbed Down Americans. Mexican and other Illegals. The Federal Reserve Bank. The One world Government Organizations. General Electric. Free Trade Laws.
Uninvolved Americans (those who do not care) Greed and All Other Sins, The Godless Masses and Iran. anon

Libya-Owned Arab Banking Corp. Drew at Least $5 Billion From Fed in Crisis
By Donal Griffin and Bob Ivry - Apr 1, 2011 9:46 AM MT
Could it possibly be that American governmental, and big business rulers, are some of America's own worst enemies? What is your take, given this vital info about The FED? Is internal corruption at least as dangerous as Radical Terrorism for our very survival as a nation?
Please comment knowing that anger is permitted but no foul language is accepted? Thank you. Ruby *o*

Arab Banking Corp ., then part-owned by the Libyan state, used a New York branch to borrow at least $5 billion from the U.S. Federal Reserve in 2008 and 2009. Photographer: Chris Ratcliffe/Bloomberg News

Chart: Federal Reserve's Discount Window
Arab Banking Corp., the lender part- owned by the Central Bank of Libya, used a New York branch to get 73 loans from the U.S. Federal Reserve in the 18 months after Lehman Brothers Holdings Inc. collapsed.

The bank, then 29 percent-owned by the Libyan state, had aggregate borrowings in that period of $35 billion -- while the largest single loan amount outstanding was $1.2 billion in July 2009, according to Fed data released yesterday. In October 2008, when lending to financial institutions by the central bank’s so- called discount window peaked at $111 billion, Arab Banking took repeated loans totaling more than $2 billion.

Fed officials say all the discount window loans made during the worst financial crisis since the 1930s have been repaid with interest.

The U.S. government has frozen assets linked to the regime of Libyan ruler Muammar Qaddafi and engaged in air strikes against his military forces, which are battling a rebel uprising in the North African country. Arab Banking got an exemption that allows the firm to continue operating while barring it from engaging in any transactions with the Libyan government, according to the U.S. Treasury Department.

Sanders Reacts
“It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya,” Senator Bernard Sanders of Vermont, an independent who caucuses with Democrats, wrote in a letter to Fed and U.S. officials.

The letter was addressed to Fed Chairman Ben S. Bernanke, Treasury Secretary Timothy F. Geithner and John Walsh, acting comptroller of the currency. The figure refers to the aggregate amount of loans the bank received under U.S. lending programs. Arab Banking, known as ABC, owed about $4 billion to the Fed under other bailout programs in the fall of 2009, data released in December show.

“ABC has a robust balance sheet, is amply capitalized and currently maintains a comfortable liquidity position,” the company said in an e-mailed statement. “ABC currently has no outstanding loans under any Federal Reserve, or other, emergency lending program.”

Libya’s Stake
Jack Gutt, a spokesman for the Federal Reserve Bank of New York, declined to comment. Arab Banking said Dec. 2 that Libya’s stake in the Manama, Bahrain-based lender had increased to 59 percent.

“There was an uneasy detente between the United States and Libya” when the loans were made, said William Poole, senior economic adviser to Merk Investments LLC and a former president of the Federal Reserve Bank of St. Louis. “It would not happen in the morning.”

The New York branch, on Park Avenue in midtown Manhattan, deals mainly in trade finance, according to its website. David Siegel is the branch’s treasurer. The bank’s chairman is Mohammed Husain Layas, chief executive officer of the Libyan Investment Authority. The CEO is Bahrain-based Hassan Ali Juma.

“ABC’s New York branch conducts wholesale business and plays an important role in helping U.S. companies conduct business in the Middle East,” the company said in the statement. “The New York branch of ABC also participates in enhancing the liquidity of U.S. markets and virtually all of its employees are U.S. citizens.”

Company’s Loss
Arab Banking reported a loss of $880 million in 2008 as it took a $1.1 billion charge tied to structured investment vehicles and derivative products known as collateralized debt obligations. Arab Banking recovered during the next two years, posting profits totaling $265 million.

Libya previously shared the bank with the Abu Dhabi Investment Authority and the Kuwait Investment Authority, both sovereign investment funds. The Libyan Central Bank bought out the Abu Dhabi stake in 2010 and took majority control, which prompted Fitch Ratings in December to downgrade Arab Banking’s credit rating.

In March, after the U.S. froze Libya’s assets, Fitch downgraded the bank’s credit rating again, this time to “junk” status. Contracts to protect Arab Banking’s debt, which typically rise as investor confidence deteriorates, increased by 186 basis points to 500 during March. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

Uncertain Outcome
“Nobody knows how the situation in Libya is going to work out finally and who will ultimately be in charge and obviously who will be running institutions like the central bank,” Philip Smith, a London-based Fitch analyst, said in a phone interview.

Under the asset freeze, the bank has been prevented from conducting transactions with the Qaddafi regime and can thus continue trading with other customers as usual, Smith said.

Arab Banking “has a policy of complying with all applicable sanctions regimes and has conducted, and will continue to conduct, its dealings in strict and total compliance with all relevant laws and regulations,” the company said in the statement.

The bank listed deposits of $17.5 billion at the end of 2010. According to a report from the Fitch Ratings firm, the Libyan Central Bank places “sizeable deposits” with the lender. Marti Adams, a spokeswoman for the Department of Treasury, declined to comment on whether Arab Banking is holding any frozen Libyan assets.

“It is today escaping the economic sanctions imposed to hobble Muammar Qaddafi’s brutal regime,” Sanders said in his letter. “Why would the U.S. government exempt the Arab Banking Corporation from economic sanctions when it is primarily owned by the Central Bank of Libya?”

Bloomberg News has posted the Fed documents for Bloomberg Professional Service subscribers, as well as online at www.bloomberg.com.

To contact the reporters on this story: Donal Griffin in New York at Dgriffin10@bloomberg.net; Bob Ivry in New York at bivry@bloomberg.net.

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net