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Bloomberg News Sues the Federal Reserve Over Bailout Collateral

November 7, 2008
Jason Green
Main

Bloomberg News is reporting that it has just filed a lawsuit against the Federal Reserve:

Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.

The lawsuit is based on the U.S. Freedom of Information Act, which requires federal agencies to make government documents available to the press and the public, according to the complaint. The suit, filed in New York, doesn’t seek money damages.

“The American taxpayer is entitled to know the risks, costs and methodology associated with the unprecedented government bailout of the U.S. financial industry,” said Matthew Winkler, the editor-in-chief of Bloomberg News, a unit of New York-based Bloomberg LP, in an e-mail.

The Fed has lent $1.5 trillion to banks, including Citigroup Inc. and Goldman Sachs Group Inc., through programs such as its discount window, the Primary Dealer Credit Facility and the Term Securities Lending Facility. Collateral is an asset pledged to a lender in the event that a loan payment isn’t made.

The Fed made the loans under 11 programs in response to the biggest financial crisis since the Great Depression. The total doesn’t include an additional $700 billion approved by Congress in a bailout package.

This would certainly be nice to know… Why won’t the Feds honor the FOIA request?

6 Comments

6 Responses

  1. Italian Guy  •  November 8, 2008 @3:33 am

    Maybe I’m wrong, but the Federal Reserve it’s NOT a Federal Agency, despite his name.

    They are a privately hold bank, which has the right to print money.

    I’m wrong? Please expain to me.

    Enjioy

  2. Jason  •  November 10, 2008 @3:17 pm

    The Fed is transparent in that it is subject to the oversight of Congress. Is twice a year not fast enough? The intent of Congress in shaping the Federal Reserve Act was to keep politics out of monetary policy. Legislation requires that the Federal Reserve reports annually on its activities to the Speaker of the House of Representatives.

    http://nomdeals.blogspot.com

  3. olc  •  November 10, 2008 @11:01 pm

    What do you expect when a group as economically as ignorant as Congress is conned into a bailout which has no specifics about the use of the $700 Billion? My opposition to the bailout is not because we don’t need to act, but we need to decide the best way BEFORE authorizing the clowns who caused the problems to spend that kind of money.

  4. Steve Evans  •  November 10, 2008 @11:09 pm

    The Fed is a quasi-public agency. It has both public and private components. See:

    http://en.wikipedia.org/wiki/Federal_Reserve_System

  5. Disgusted  •  November 12, 2008 @9:19 am

    Italian Guy,

    Maybe you’ve never required transparancy from anybody spending your money, but when they reach into my wallet without my permission and give to their friends, any amount of money they want, I demand to see what is happening. I don’t care if it is public or private – the minute that they take our collective money is when transparancy is demanded!!!

    Since I have e-mailed relentlessy to my (leaders-HUH!) and they have not responded in any way, I have decided that the last thing left for me, is to quit paying taxes – They get no more from me!!! When a couple of million disgruntled Amerikans finally wake up from their Zombie state and do the same thing, we will start getting a fascistic government to listen.

    Disgusted ex-Amerikan

  6. John  •  November 19, 2008 @5:23 am

    Mr. Disgusted, i do agree with your point of view. Something got to get started somewhere!

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