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"Fed Defies Transparency Aim in Refusal to Disclose

Published:

"Fed Defies Transparency Aim in Refusal to Disclose (Update1)

By Mark Pittman, Bob Ivry and Alison Fitzgerald

"Nov. 10 (Bloomberg) -- 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 S. 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.''

Federal Reserve spokeswoman Michelle Smith declined to comment on the loans or the Bloomberg lawsuit. Treasury spokeswoman Michele Davis didn't respond to a phone call and an e-mail seeking comment.  "

http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide

Entry #975

Comments

1.
Comment by Piaceri - November 10, 2008, 12:52 pm
So what is our Federal Reserve doing with our money that they do not want us to know? Very troubling indeed.
2.
Rick GComment by Rick G - November 10, 2008, 2:28 pm
Yes, this is very troubling. These guys are looting the treasury. This "bailout" should be stopped immediately and investigated. Our simpering congress doesn't have the cajones to do a damn thing.
3.
konaneComment by konane - November 10, 2008, 6:44 pm
Thanks Piaceri and Rick G! Very troubling indeed. Must be quite a power trip to spend ... have taxpayers pick up the tab.

Congress hasn't known the definition of cojones much less having them in so many years I can't remember.

Bet next presidential election cycle rolls around Fair Tax will have significant support.

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