Mr. Chairman, thank you for this opportunity. These truly are extraordinary times in our financial service sector. Since one year ago, the Federal Reserve opened the Fed's discount window in the amount of $29 billion for Barry Stearns. The American people are looking at the actions of both the Federal Reserve and the Treasury Secretary, and they are wondering if their government is making an historic shift, jettisoning the free market capitalism in favor of centralized government economic planning.
I wonder if Mr. Secretary, if you would comment on that. I do not believe that concern is justified. I understand why people would be worried about this.
But what we're doing is using authority that Congress gave us. Authority that was designed to help protect the American economy from these kind of... Reclaiming my time, Mr. Secretary, what provision in the Constitution could you point to to give authority for the actions that have been taken by the Treasury since March of 2008?
Oh, well, the Congress legislated... in the Emergency Economic Stabilization Act, a range of very important new authorities. So you're in the Constitution. What in the Constitution could you appoint to give authority to the Treasury for the extraordinary actions that have been taken? Every action that the Treasury and the Fed and the FDIC has been using authority granted by this body, by this body of the Congress.
And in the Constitution, what could you appoint to? Under the laws of the land, of course. And if I could move to the Federal Reserve, Chair, if you could point to what provision in the Constitution would give authority to the Federal Reserve.
This has been over $10 trillion that we're talking about. I don't know where $10 trillion comes from. The Congress has the right to authorize funds, which is what they did in the TARP program. And they have given us, in the 1930s, they gave the Federal Reserve the power for emergency lending as a means of addressing financial crises, which is what we've done. And to the Federal Reserve, Chair, do you believe there are any limits on the authority that the Federal Reserve has taken since last March of 08?
The loans we make have to be fully secured and collateralized. We have practical limits in terms of our ability to manage monetary policy. So there are obviously limits. We've reported extensively to the Congress on all the actions that we've taken, and the actions we've taken have been...
solely and entirely for the purpose of protecting the American economy from the effects of a financial collapse. We've seen both China, Russia, and Kazakhstan make calls for an international monetary conversion to an international monetary standard as soon as the G20, and I'm wondering would you categorically renounce the United States moving away from the dollar and going to a global currency as suggested this morning by China and also by Russia, Mr. Secretary? I would, yes.
You would categorically renounce the Federal Reserve, Chair? I would also. You would also.
Could you tell me why AIG was not put into receivership as opposed to conservatorship, Mr. Secretary? Again, no legal means existed under U.S. law to resolve AIG using the kind of powers available to the FDIC to resolve a bank. Because of the absence of authority, your government was faced with no good options. And we chose the best option available at the time to help protect the economy from systemic damage.
If we had different authority, we would have different choices. And to the Federal Reserve, Chair, there's a quick... The Federal Reserve has denied giving information to the American people about the overnight loans that are made to the companies in terms of the bailout.
Bloomberg had initiated a lawsuit, and the Federal Reserve has rejected 20 members. of this Congress have written a letter to the Federal Reserve asking that the American people be given the information about which banks are made the loans, what the collateralization is. Can you tell me why the Federal Reserve does not want the American people to know who these loans are made to on an overnight basis? First of all, it has nothing to do with the bailout. This is normal short-term lending done by the Federal Reserve to banks as has been done by central banks around the world for hundreds of years.
This provides short-term liquidity to these banks. Hundreds of banks, both large and small, come to the come to the discount window. They provide collateral for their loans.
We have never lost a penny on this program. And Mr. Chair, why would the American people be disadvantaged by knowing this information? They would not be disadvantaged necessarily.
Well, they would in the following sense, that the concern is that if banks were revealed to be borrowing and others were not, they might, inference might be drawn that they were in weaker condition than they might in fact be. There's a problem of what's called stigma. So that if banks are perceived as being weaker, that they have to come to the Fed. that others may not wish to deal with them and they would therefore not come to the Fed.
In fact, that was a problem we had at the beginning of this episode that no one wanted to come borrow even though it was clear that the banking system needed to get liquidity from us. So we have tried to make sure that their information is protected so that they will in fact come and take the liquidity they need to help stabilize the banking system. Mr. Secretary, as I understand it, approximately 90 to 95 percent in the new program that you have just announced yesterday of the funding would come from the taxpayers.
Is that true? Or perhaps the leveraging is a six to seven to one leveraging on the purchasing of the private partnership, the toxic assets that are available. When the returns come back to the American people, will the American people be receiving 90 to 95 percent of the benefit, or will it be another figure? The gentleman's time has expired. Mr. Chair, could I have an answer from the...
No, no, as I explained, members control the time. You cannot extend your time into somebody else's time and then get an answer in addition. As I said, the person speaking at the expiration of the time will be the last person speaking.
You cannot, if members use their time to extend the discussion, then members lower down won't get a chance to answer. When the time expires, the person speaking will be the last person speaking.