Fed thinks disclosure is a bad idea
The Federal Reserve Board is trying to head off a court order to reveal, by the end of the month, which banks accepted trillions of dollars worth of emergency loans from the Fed to stay afloat. John Dimsdale reports
The Federal Reserve Bank (www.federal-reserve.org/)
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TEXT OF STORY
Tess Vigeland: The Federal Reserve Board is trying to head off a court order to reveal which banks accepted emergency loans. Earlier this week, a U.S. District Judge granted a Freedom of Information Act request by Bloomberg News. John Dimsdale reports the Fed, and the banks, think disclosure is a bad idea.
JOHN DIMSDALE: Banks say that going public would undermine their credibility, scaring away customers and investors and causing more bank failures. The Fed also supports keeping the list of banks secret. Villanova business school professor Victor Li suspects it's a question of timing.
VICTOR LI: We're at the point where the economy is beginning to show signs of stabilization and perhaps the Fed doesn't want to introduce additional elements of instability or at least unpredictability.
If the courts back off, Congress might require disclosure anyway. The Senate has approved an amendment that would force the Fed to reveal the banks. Vermont Independent Senator Bernie Sanders sponsored the provision.
BERNIE SANDERS: It is simply insane that you have an institution, the Fed, that is lending out trillions of taxpayer dollars, at zero interest rates, and then when asked, they refuse to tell us who has received this money.
So far, U.S. District Court Judge Loretta Preska is standing by her August 31st deadline for a list of banks that took emergency loans and the amounts they borrowed.
In Washington, I'm John Dimsdale for Marketplace.
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From Sandwich, IL, 09/01/2009
I would say that it is a little too late to "undermine the credibility" of the banks. They have done a fine job of that on their own! The time is right for open discussion on how bad the problem with bank's assets really are and a cooperative effort (banks, customers(taxpayers) and government) to ease and SOLVE the problem. Those exposed as derelict in their duty as custodians of the banks (and customers) assets should be prosecuted to the full extent of the law. Only when accountability is put into effect will the situation change for the better. People need to know that there will be consequences for "bad behaviour;" otherwise they will do do whatever they can get away with.
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