Sunday, March 21, 2010
The Federal Reserve has now lost two legal decisions in its effort to prevent the release of records showing which banks borrowed from the national bank’s discount window during the financial crisis of 2008. Bloomberg News and Fox Business Network sought the identities of the banks through the Freedom of Information Act, but after the Fed refused to comply with the request, the news agencies filed a lawsuit, winning their first case last year.
The ruling on Friday by the U.S. Court of Appeals in Manhattan upheld the lower court decision, saying the Fed must release documents related to the $2 trillion loan program that was instituted to prevent a monumental collapse of the financial industry.
The Fed, which has not said whether it will appeal the latest ruling, contends the disclosure of those banks that sought help would stigmatize them in the eyes of consumers and cause “severe and irreparable competitive injury.”
U.S. Senator Bernie Sanders (I-Vermont) hailed the decision as a “major victory” for taxpayers. “This money does not belong to the Federal Reserve,” Sanders said in a statement. “It belongs to the American people, and the American people have a right to know where more than $2 trillion of their money has gone.”
-Noel Brinkerhoff
Federal Reserve Must Disclose Bank Bailout Records (by David Glovin and Bob Van Voris, Business Week)
Public, 2; Fed, 0 (by Liz Moyer, Forbes)
Court Orders Federal Reserve to Release Bailout Documents to Bloomberg News (by Noel Brinkerhoff)
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