Still, the verdict may set an interesting precedent for those that believe the Fed has gained too much power over the past 5 years with Dodd-Frank and voting power over the IOER.The Federal Reserve strongly believes that its actions in the AIG rescue during the height of the financial crisis in 2008 were legal, proper and effective. The court's decision today in Starr International Company, Inc. v. the United States recognizes that AIG's shareholders are not entitled to compensation for that decision, and that the Federal Reserve's extension of credit to AIG prevented losses to millions of policyholders, small businesses, and American workers who would have been harmed by AIG's collapse during the financial crisis. The terms of the credit were appropriately tough to protect taxpayers from the risks the rescue loan presented when it was made.
|Source: Federal Reserve June 2015 Empire State Manufacturing Survey|
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Finally, GAFI recently published a guest post on SeekingAlpha titled US Bancorp: One Of Buffett's Favorite Banks Still Undervalued By 38%. The post argues that the discount rate for banks and US Bancorp in particular, should be lower than other companies and banks.