Beyond frightening to think the Fed can dish out a staggering $1.2 trillion and absolutely nobody except for a privileged few are even told about it.

(Politico) — The Federal Reserve lent Wall Street firms a staggering $1.2 trillion in a previously unrevealed bank bailout that dwarfs the size of TARP, reports Bloomberg News.

The $1.2 trillion — which Federal Reserve Chairman Ben Bernanke lent to banks and other firms to prevent the economy from collapsing is roughly equivalent to the amount that U.S. homeowners currently owe on 6.5 million underwater mortgages, Bloomberg said.

Bloomberg News received the information through Freedom of Information Act requests, litigation and an act of Congress. The $1.2 trillion figure is the compilation of the balance for seven programs instituted by the Fed.

“Data gleaned from 29,346 pages of documents obtained under the Freedom of Information Act and from other Fed databases of more than 21,000 transactions make clear for the first time how deeply the world’s largest banks depended on the U.S. central bank to stave off cash shortfalls,” write Bloomberg News’s Bradley Keoun and Phil Kuntz.

The Federal Reserve has argued that their transactions should be kept private, over fears that releasing the names of the banks that borrowed American money would stigmatize banks and damage stock prices.

One aspect of the bailout sure to exasperate critics of the Federal Reserve is that almost half of the Fed’s top 30 borrowers were European firms.

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