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FBI probes troubled financial giants

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FBI probes troubled financial giants

FBI probes troubled financial giants
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There is still no sign of an agreement on a US financial bail-out plan and the bad news gets worse: the FBI has opened an investigation into the four biggest victims of the global financial crisis.

Lehman Brothers, which sank last week, Fannie Mae, Freddie Mac and AIG, which were all thrown lifelines by the US federal government, are being probed for possible fraud.

Meanwhile, as Congress continues to mull over the US government’s rescue package, Federal Reserve chairman Ben Bernanke asked it to hurry up. He said: “Stabilisation of our financial system is an essential precondition for economic recovery. I urge the Congress to act quickly to address the grave threats to financial stability that we currently face.

“For its part, the Federal Open Market Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability,” said Bernanke.

Despite his pleas for immediate action, both Democrats and Republicans want guarantees that the rescue plan will work. With 500 billion euros worth of US taxpayers money at stake, it is a gamble no-one in Congress wants to lose.