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Fed Refuses to Disclose Recipients of $2 Trillion
Key Excerpts from Article on Website of Bloomberg News
Posted: December 19th, 2008
http://www.bloomberg.com/apps/news?pid=20601109&sid=apx7XNLn...
The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral. Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression. The Fed responded Dec. 8, saying its allowed to withhold internal memos as well as information about trade secrets and commercial information. If they told us what they held, we would know the potential losses that the government may take and thats what they dont want us to know, said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC. The Fed stepped into a rescue role that was the original purpose of the Treasurys $700 billion Troubled Asset Relief Program. The central bank loans dont have the oversight safeguards that Congress imposed upon the TARP. Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that werent rated AAA. There has to be something they can tell the public because we have a right to know what they are doing, said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press.
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