Federal Reserve Refuses to Disclose Recipients of $2 Trillion in Emergency Loans
The privately-owned Federal Reserve Corporation is giving away another $2 Trillion in taxpayer's money under rules that were mostly made up in the last 15 months as their economic shell game began to fall apart with the collapse of the Wall Street-inflated housing market bubble. Even though this is nearly 3 times the amount of the $700 Billion Wall Street Bailout, Congressional approval is not required. Despite recent statements by Paulson, Bernanke and other principals about the importance of transparency and disclosure, they are not revealing the names of the parties receiving the emergency loans or the assets they're taking on as collateral. Bloomberg News has requested information under FOIA and also filed a lawsuit to force disclosure.
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.