Court Rules Federal Reserve Must Disclose Emergency Loan Details
http://www.huffingtonpost.com/2009/08/25/c...r_n_267960.html
Full Version: Court Rules Federal Reserve Must Disclose
Federal Reserve loses suit demanding transparency
Mon Aug 24, 2009 8:39pm EDT
NEW YORK (Reuters) – A federal judge on Monday ruled against an effort by the U.S. Federal Reserve to block disclosure of companies that participated in and securities covered by a series of emergency funding programs as the global credit crisis began to intensify.
In a 47-page opinion, Chief District Judge Loretta Preska of the federal court in Manhattan said the central bank failed to show that disclosure would cause borrowers in the Federal Reserve System to suffer "imminent competitive harm," by stigmatizing them for using Fed lending programs.
"The board essentially speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed," she wrote. "Conjecture, without evidence of imminent harm, simply fails to meet the board’s burden."
Monday’s ruling comes as lawmakers and investors demand greater disclosure in how the government manages a series of programs designed to lift the economy out of its deepest recession in decades.
The case arose when two Bloomberg News reporters submitted requests under the federal Freedom of Information Act (FOIA) about actions the Fed took to shore up the financial system in 2007 and early 2008, including an expansion of lending programs and the sale of Bear Stearns Cos to JPMorgan Chase & Co (JPM.N).
More…
http://www.reuters.com/article/ousiv/idUSTRE57O03P20090825
Mon Aug 24, 2009 8:39pm EDT
NEW YORK (Reuters) – A federal judge on Monday ruled against an effort by the U.S. Federal Reserve to block disclosure of companies that participated in and securities covered by a series of emergency funding programs as the global credit crisis began to intensify.
In a 47-page opinion, Chief District Judge Loretta Preska of the federal court in Manhattan said the central bank failed to show that disclosure would cause borrowers in the Federal Reserve System to suffer "imminent competitive harm," by stigmatizing them for using Fed lending programs.
"The board essentially speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed," she wrote. "Conjecture, without evidence of imminent harm, simply fails to meet the board’s burden."
Monday’s ruling comes as lawmakers and investors demand greater disclosure in how the government manages a series of programs designed to lift the economy out of its deepest recession in decades.
The case arose when two Bloomberg News reporters submitted requests under the federal Freedom of Information Act (FOIA) about actions the Fed took to shore up the financial system in 2007 and early 2008, including an expansion of lending programs and the sale of Bear Stearns Cos to JPMorgan Chase & Co (JPM.N).
More…
http://www.reuters.com/article/ousiv/idUSTRE57O03P20090825
Bad Timing for Ben
from Clusterstock by Yael Bizouati
bernankemad tbi
The lawsuit Bloomberg reporters won yesterday against the Fed asking it to release information about its emergency bank loans is pretty untimely for Ben Bernanke, who was appointed for a second term today. It could give a whole lot more ammo for its detractors who have been pushing for more scrutiny of the central bank, and weaken Bernanke’s argument that providing the Government Accountability Office more scrutiny of the Fed could be harmful.
The Fed had so far refused to provide the names of the banks that took the loans, saying it would “harm them.”
According to the lawsuit, staff members in the board’s division of monetary affairs justified their refusal to unveil the info by saying that “the stigma [to borrow from the FED] can quickly place an institution in a weakened condition vis-à-vis its competitors by causing a loss of confidence in the institution, a sudden outflow of deposits, a loss of confidence by market analysts, a drop in the institution’s stock price and a withdrawal of market sources of liquidity. “
Ah yeah, sure. But there’s just one problem here--this is taxpayers’ money we’re talking about. And remember what Bernanke said last month when he delivered his semiannual monetary policy report to the Congress?
Let us refresh your memory: “The Congress and the American people have a right to know how the Federal Reserve is carrying out its responsibilities and how we are using taxpayers' resources. The Federal Reserve is committed to transparency and accountability in its operations. We report on our activities in a variety of ways.”
from Clusterstock by Yael Bizouati
bernankemad tbi
The lawsuit Bloomberg reporters won yesterday against the Fed asking it to release information about its emergency bank loans is pretty untimely for Ben Bernanke, who was appointed for a second term today. It could give a whole lot more ammo for its detractors who have been pushing for more scrutiny of the central bank, and weaken Bernanke’s argument that providing the Government Accountability Office more scrutiny of the Fed could be harmful.
The Fed had so far refused to provide the names of the banks that took the loans, saying it would “harm them.”
According to the lawsuit, staff members in the board’s division of monetary affairs justified their refusal to unveil the info by saying that “the stigma [to borrow from the FED] can quickly place an institution in a weakened condition vis-à-vis its competitors by causing a loss of confidence in the institution, a sudden outflow of deposits, a loss of confidence by market analysts, a drop in the institution’s stock price and a withdrawal of market sources of liquidity. “
Ah yeah, sure. But there’s just one problem here--this is taxpayers’ money we’re talking about. And remember what Bernanke said last month when he delivered his semiannual monetary policy report to the Congress?
Let us refresh your memory: “The Congress and the American people have a right to know how the Federal Reserve is carrying out its responsibilities and how we are using taxpayers' resources. The Federal Reserve is committed to transparency and accountability in its operations. We report on our activities in a variety of ways.”
Judge To Fed: Fess Up
from Clusterstock by Lawrence Delevingne
FederalReserveCommercialPaper
Looks like the Fed is going to reveal a few secrets of its bailout of the financial system.
Thanks to a Bloomberg lawsuit, Washington must disclose who got taxpayer dollars last fall.
Bloomberg: The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.
Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.
Watchdogs are pleased. “The public deserves to know what’s being done with the money,” said Lucy Dalglish, executive director of Reporters Committee for Freedom of the Press. “This ought to be a wake-up call for the public that they need to be far more educated about this.”
http://www.businessinsider.com/judge-to-fed
Here's the full ruling:
Bloomberg Lawsuit Judgment Popout
http://www.scribd.com/doc/19057083/Bloombe...awsuit-Judgment
from Clusterstock by Lawrence Delevingne
FederalReserveCommercialPaper
Looks like the Fed is going to reveal a few secrets of its bailout of the financial system.
Thanks to a Bloomberg lawsuit, Washington must disclose who got taxpayer dollars last fall.
Bloomberg: The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.
Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.
Watchdogs are pleased. “The public deserves to know what’s being done with the money,” said Lucy Dalglish, executive director of Reporters Committee for Freedom of the Press. “This ought to be a wake-up call for the public that they need to be far more educated about this.”
http://www.businessinsider.com/judge-to-fed
Here's the full ruling:
Bloomberg Lawsuit Judgment Popout
http://www.scribd.com/doc/19057083/Bloombe...awsuit-Judgment
Federal Reserve Ordered to Turn Over Data on Bailout Loans
New York Law Journal
The Federal Reserve has been ordered by a federal judge to release records about emergency loans made to investment banks and other financial institutions during the height of the economic meltdown. Rejecting a Federal Reserve claim that the material was exempt from disclosure, Southern District of New York Judge Loretta Preska granted a Freedom of Information Act request from the Bloomberg organization. Her decision contrasted with one made by fellow Southern District Judge Alvin Hellerstein in July.
http://www.law.com/jsp/article.jsp?id=1202...Bailout%20Loans
New York Law Journal
The Federal Reserve has been ordered by a federal judge to release records about emergency loans made to investment banks and other financial institutions during the height of the economic meltdown. Rejecting a Federal Reserve claim that the material was exempt from disclosure, Southern District of New York Judge Loretta Preska granted a Freedom of Information Act request from the Bloomberg organization. Her decision contrasted with one made by fellow Southern District Judge Alvin Hellerstein in July.
http://www.law.com/jsp/article.jsp?id=1202...Bailout%20Loans
Quelle Surprise! Fed Uses Scare Tactics to Try to Forestall Loan Disclosures
Posted: 26 Aug 2009 11:07 PM PDT
In a show of how much our government thinks that serving the financial oligarchy, rather than the citizenry, is its prime duty, the Fed is fighting to stop the court-ordered disclosure of who borrowed money under the Fed's various lending facilities. The reason I lump the Fed in with "the government" is that the central bank has been serving as an off-balance sheet entity of the Treasury for quite some time. And not only are the Fed and Treasury acting in near lockstep, but there has been no meaningful change in the government stance towards the banksters. Yes, Team Obama makes more of a show of trying to rein them in, but push comes to shove, it's merely Paulson version 2.0: same content, better packaging.
Paulson's success in muscling through the TARP shows that "when in doubt, claim the economy will fall apart.." That worked so well that now the Fed has the temerity to assert that revealing such delicate information as who is into the Fed most deeply might send the markets into a tailspin. The idea that the recovery is so fragile that a little disclosure would prove damaging is at odds with the official line that the economy is recovering and we no longer need to worry about banks.
The Fed has asked the judge's order to be stayed until it can file an appeal.
From Bloomberg:
The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identifies of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.
“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”
The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as welll....
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders....
“Our argument is that the public interest in disclosure outweighs the banks’ interest in secrecy,” said Thomas Golden, a lawyer with New York-based Willkie Farr & Gallagher LLP who represents Bloomberg.
Preska’s Aug. 24 ruling rejected the Fed’s argument that the records should remain private because they are trade secrets and would scare customers into pulling their deposits.
“What has the Fed got to hide?” said Senator Bernie Sanders, a Vermont independent who sponsored a bill to require the Fed to submit to an audit by the Government Accountability Office. “The time has come for the Fed to stop stonewalling and hand this information over to the public,” he said in an e-mail.
The lawyers for the Fed sound as if they were grasping at straws. Trade secrets? Bank runs? It is true that banks were afraid to borrow at the discount window last year for fear of being stigmatized. But I would presume that use of these facilities is so widespread that the revelation of information would hardly be stigmatizing now.
Posted: 26 Aug 2009 11:07 PM PDT
In a show of how much our government thinks that serving the financial oligarchy, rather than the citizenry, is its prime duty, the Fed is fighting to stop the court-ordered disclosure of who borrowed money under the Fed's various lending facilities. The reason I lump the Fed in with "the government" is that the central bank has been serving as an off-balance sheet entity of the Treasury for quite some time. And not only are the Fed and Treasury acting in near lockstep, but there has been no meaningful change in the government stance towards the banksters. Yes, Team Obama makes more of a show of trying to rein them in, but push comes to shove, it's merely Paulson version 2.0: same content, better packaging.
Paulson's success in muscling through the TARP shows that "when in doubt, claim the economy will fall apart.." That worked so well that now the Fed has the temerity to assert that revealing such delicate information as who is into the Fed most deeply might send the markets into a tailspin. The idea that the recovery is so fragile that a little disclosure would prove damaging is at odds with the official line that the economy is recovering and we no longer need to worry about banks.
The Fed has asked the judge's order to be stayed until it can file an appeal.
From Bloomberg:
The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identifies of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.
“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”
The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as welll....
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders....
“Our argument is that the public interest in disclosure outweighs the banks’ interest in secrecy,” said Thomas Golden, a lawyer with New York-based Willkie Farr & Gallagher LLP who represents Bloomberg.
Preska’s Aug. 24 ruling rejected the Fed’s argument that the records should remain private because they are trade secrets and would scare customers into pulling their deposits.
“What has the Fed got to hide?” said Senator Bernie Sanders, a Vermont independent who sponsored a bill to require the Fed to submit to an audit by the Government Accountability Office. “The time has come for the Fed to stop stonewalling and hand this information over to the public,” he said in an e-mail.
The lawyers for the Fed sound as if they were grasping at straws. Trade secrets? Bank runs? It is true that banks were afraid to borrow at the discount window last year for fear of being stigmatized. But I would presume that use of these facilities is so widespread that the revelation of information would hardly be stigmatizing now.
Federal Reserve Says Emergency-Loan Disclosures Will Hurt Economy, Banks The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.
http://www.bloomberg.com/apps/news?pid=206...id=a6mdEyvr7Mpk
http://www.bloomberg.com/apps/news?pid=206...id=a6mdEyvr7Mpk
QUOTE(Snuffysmith @ Aug 27 2009, 02:41 PM) 
Federal Reserve Says Emergency-Loan Disclosures Will Hurt Economy, Banks The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.
http://www.bloomberg.com/apps/news?pid=206...id=a6mdEyvr7Mpk
http://www.bloomberg.com/apps/news?pid=206...id=a6mdEyvr7Mpk
If Obama buckles on this and fails to support more transparency, it is time for democrats to start looking for a replacement...Let's start vetting Robert Kennedy jr...
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