Bankruptcy

Court Rules Federal Reserve Must Disclose Borrowers

By mcbride

There is a trend to hold the Federal Reserve more accountable for its many actions taken in recent months in an effort to stem the economic downturn.  Under a freedom of information action, news agency, Bloomberg, sought this information and stated as its basis the fact that the US taxpayer had become an involuntary investor in many of these financial institutions due to the Fed?s loans to them.

?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.?

Here is a link to the article from Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=a7CC61ZsieV4

Michael

Full post as published by Texas Lawyer Blog on August 25, 2009 (boomark / email).