Saturday, December 13, 2008

Why is the Fed Refusing to Disclose Recipients of Bailout?

The Federal Reserve has refused requests by Bloomberg News to disclose who are the recipients of more than $2 trillion of emergency loans from U.S. taxpayersl.

Bloomberg news filed suit on November 7th under the U.S. Freedom of Information Act. They were requesting details about the terms of 11 Fed lending programs that were created by the Fed in response to the deepest financial crisis since the Great Depression.

The Fed responded by saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP. So far total Fed lending is reported to exceed $2 trillion. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since September, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA.

Congress is demanding more transparency from the Fed and Treasury. THe Fed however is arguing that the release of such information to the public would cause a loss in confidence in and between financial institutions.


The public can't know what the government is doing with our money?

That is ridiculous.

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