Bloomberg is reporting:
The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends
far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities
the banks are pledging in return.
"The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston-based Loomis Sayles & Co., where he co-manages $17 billion in bonds. "In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''
Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression.
"It's your money; it's not the Fed's money,'' said billionaire Ted Forstmann, senior partner of Forstmann Little & Co. in New York. ``Of course there should be transparency.''
The $2 trillion is taxpayer money, and taxpayers have a right to know where that money is going, and what sweetheart deals Bernanke is giving out, and who's getting what. Bernanke needs to go, and either before or after he goes, the Fed needs to come clean about who it has given 2 trillion in loans to, and what the collateral is.