Related Stories
Fed Shrouding $2 Trillion in Bank Loans in Secrecy, Suit Says
Key Excerpts from Article on Website of Bloomberg News
Posted: April 25th, 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=aS89AaGj...
U.S. taxpayers need to know the risks behind the Federal Reserves $2 trillion in lending to financial institutions because the public is now an involuntary investor in the nations banks, according to a court filing by Bloomberg LP. The Fed refuses to name the borrowers, the amounts of loans or assets banks put up as collateral under 11 programs, arguing that doing so might set off a run by depositors and unsettle shareholders. The largest U.S. banks have tapped more than $125 billion in government aid under the Troubled Asset Relief Program in the past seven months. Assets, including loans and securities, on the Fed balance sheet totaled $2.09 trillion as of April 9. Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, the Fed argued in its March 4 response. The release of the information can fuel market speculation and rumors, including a drop in stock price and a run on the bank, the Fed said. Bloomberg replied yesterday that these speculative injuries relate only to the reactions of customers, shareholders and other members of the public, not to competitors use of the borrowers proprietary information to their advantage, the exception to disclosure under the FOIA law. Government loans, spending or guarantees to rescue the U.S. financial system total more than $12.8 trillion since the international credit crisis began in August 2007, according to data compiled by Bloomberg as of March 31. The total includes about $2 trillion on the Feds balance sheet.
Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.
Related Stories
Latest News
Key News Articles from Years Past
