"America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here. The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange ..." http://online.wsj.com/article/SB100....html?KEYWORDS=federal+reserve+covert+bailout In computer science, there is a maxim that every problem can be solved by adding a level of indirection. I suspect that lawyers have latched on to this principle and are able to get around the law by adding an intermediate category, by which the [existing] law simply cannot apply. In fact, it shows that law can always be broken if there needs to be precedent in order to convict. All you have to do is create a new intermediate concept that doesn't exist to get around specific rules and existing laws and regulations. Bernanke understands this "extra level of indirection" to get around the letter of the law all to well, and is abusing the spirit of the law that are on the books when he makes/allows such arrangements. This isn't singularly a problem with the Fed, but any entity that has to be regulated and has clever lawyers that know how to get around existing laws.