US Fed loaned Libya-backed bank billions

Dees Illustration

AFP

WASHINGTON (AFP) - The Federal Reserve lent a Libyan state-backed bank billions of dollars during the financial crisis, documents made public on Thursday have revealed.

The Arab Bank Corporation, which is today 59.3 percent owned by the Libyan government, borrowed in slices as big as $1.175 billion from the US central bank.

At the time the bank was not majority owned by the Tripoli government; other shareholders included the Kuwait Investment Authority and the Abu Dhabi Investment Authority.
The Bahrain-headquartered firm appears frequently in the Fed's records of its emergency short-term lending facilities between March 2009 and March 2010.


Since then the United States has slapped sanctions on the Libyan regime and sought to isolate Moamer Kadhafi and his top lieutenants.

The Arab Bank Corporation, which is chaired by the head of Libya's state investment fund, however is not subject to Libyan sanctions.

But some US lawmakers were incredulous about the Fed lending to the Libyan-government backed banks.

Democrat-allied Senator Bernie Sanders said the Fed made "46 emergency, low-interest loans" to the bank, providing a total of $26 billion in credit, though not at one time.

"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."

The Fed records show huge numbers of short-term liquidity loans made to American banks and the US units of banks from all over the world at the peak of the financial crisis, many for far larger sums.

A New York unit of the French-Belgian bank Dexia, which had huge potential liabilities in guarantees on municipal bonds, garnered loans for as much as $33.5 billion.

© AFP -- Published at Activist Post with license

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US Baghdad embassy will double in size: envoy

Editor's Note: The U.S. embassy in Iraq is already the largest and most expensive in the world, reportedly costing over $1.5 billion -- Now it seems safe to double that plus some inflation.

The US embassy complex in Baghdad
© AFP/File

AFP

BAGHDAD (AFP) - The US Embassy in Baghdad, already the largest in the world, is expected to double its staff after American forces pull out of the country later this year, Washington's envoy said on Friday.

"We'll be doubling our size if all of our plans go through and if we receive the money from Congress in 2011 and then again in 2012," James Jeffrey, the US ambassador in Iraq, told reporters.

He said the staff would increase "from 8,000 plus personnel that we have now to roughly double that by 2012," adding that US forces would make up only a very small part of that number.
"This will be an extraordinarily large embassy with many different functions. Some we took over from USFI (United States Forces in Iraq) and some of them continuation of the work we are doing now."

Jeffrey said that US military advisers and trainers would stay or be added to support the Iraqi military with US-made equipment such as M1A1 tanks and other weaponry. He said the added personnel would not include combat troops.

Fewer than 50,000 US troops are currently in Iraq, down from a peak of more than 170,000 and ahead of the planned full withdrawal in late 2011.

Jeffrey and Lieutenant General Lloyd Austin, the commander of US military forces in Iraq, told members of the Armed Services Committee in February that the embassy would be well protected after the withdrawal.

A private security force some 5,500 strong will protect the large US diplomatic presence in Iraq, Jeffrey told the lawmakers.

He and Austin said they were confident that the force was adequate, and that Iraq will remain stable once US troops have departed.

They said that in 2012, the American presence in Iraq will consist of up to 20,000 civilians at sites that include two embassy branches, two consulates, and three police training centres.

The figure includes armed private security personnel, support staff and diplomats.

Currently there are 2,700 armed security contractors in Iraq, Jeffrey told the senators.

© AFP -- Published at Activist Post with license

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