Bloomberg: “Libya-owned Arab Banking Corp. drew at least $5 billion from Fed in crisis”

The nation of Libya, officially christened, the “Great Socialist People’s Libyan Arab Jamahirya” on March 2, 1977, received generous liquidity transfusions from the U.S. Federal Reserve during the 2007-2010 financial crisis.

This is the same Libya whose intelligence service and Libyan embassy planned the 1986 bombing of the West Berlin nightclub, LaBelle, targeting U.S. servicemen (2 killed and dozens injured).

And this is the same Libya that was involved in the tragic Lockerbie airline terror bombing on December 21, 1988, that brought down Pan Am Flight 103 over Lockerbie, Scotland, killing 283 passengers and 16 crew members. A 3-year investigation pinpointed Libyan involvement.   Libya later took responsibility (but did not admit ‘guilt’) and paid reparations to families, in order to get relief from ‘sanctions.’

And now…

April 1, 2011 (Bloomberg)                                                                               Libya-Owned Arab Banking Corp. Drew at Least $5 Billion From Fed in Crisis  Excerpts:

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.

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U.S. citizens deserve nothing less than the same access to liquidity that was granted to the Arab National Bank Corp. at the height of the financial crisis.

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