Federal Reserve Seeks to Protect U.S. Bailout Secrets

Federal ReserveDavid Glovin and Thom Weidlich writes on Bloomberg:

The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history.

The U.S. Court of Appeals in Manhattan will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News.

“This case is about the identity of the borrower,” said Matthew Collette, a lawyer for the government, in oral arguments today. “This is the equivalent of saying ‘I want all the loan applications that were submitted.’”

Bloomberg argues that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money. Banks and the Fed warn that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell-off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued. The lower court agreed with Bloomberg.

Read More on Bloomberg

Image via Wikimedia Commons

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  • tonyviner

    I don't know a lot about his policy and I am not entirely sure that I agree with his fiscal policy but Ron Paul's new book, End the Fed, made a lot of sense in certain areas. I would still rather get rid of money all together and see the world become the great place it has the potential to be, probably won't happen as long as we still have white people, though.

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