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FEDERAL RESERVE BANK
The Federal Reserve Bank is the nation’s largest financial repository. It is responsible for
managing and lending the entire country’s financial holdings. The Federal Reserve Bank deals
mostly with government funding and loans made to business and corporations.
Changes Made to the Federal Reserve Bank’s Lending Practices
The main difference in the loans made between 2007 and 2010 was the size. The loans
made during this period were larger than any other bail out in the history of the Federal Reserve.
Loans were made to companies from all over the world including banks in Paris, Zurich, and
Scotland (Schroeder, 2011). Meanwhile, another change that took place with the big business
bail out loans was that all loans remained confidential until recently when the amounts were
publicly disclosed.
Supporting Firms Deemed “too big to fail”
Many of the large firms and companies had over-extended themselves with high-risk
loans. When the housing market fell apart in 2007 and 2008, mortgage lenders rushed to the
Federal Reserve to receive help. They were allowed to borrow upwards of $1.2 trillion dollars.
The monies lent to these larger than life firms helped them stay afloat until many of the homes
they had foreclosed on were sold and they were able to repay the massive debt (Keoun, and
Kuntz, 2011).
Were Actions Justified
Depending on whom you talk to will determine whether the loans were justified. Big
business owners and large firms would completely agree the loans were justified in an attempt to
prevent the country from falling into deep financial ruin. On the other hand, the American people
FEDERAL RESERVE BANK
who lost their homes and much of their livelihood would have much rather seen the money go
towards programs that allowed them to keep their homes and prevent them from losing
everything they had worked so hard for.

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