Tuesday, Oct 6th, 2009
The Federal Reserve should be forced to identify companies that received loans from the central bank because it can’t demonstrate that borrowers would be harmed by the disclosure, according to lawyers who won a Freedom of Information Act lawsuit.
There’s nothing proprietary in the details sought by the Bloomberg News unit of Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, attorneys for the company said today in court papers. The filing by Bloomberg opposes the Fed’s request for a court to halt disclosure of information while an appeal proceeds.
Bloomberg won a ruling from Manhattan’s chief federal judge on Aug. 24 affirming the right of U.S. taxpayers to know about the financial firms that borrowed money. The Fed last year began extending credit directly to companies that aren’t banks for the first time since it was created in 1913. Total lending by the Fed was $2.12 trillion on Sept. 30.
Divulging specifics about the loan program might touch off a run by depositors, unsettle shareholders and hurt the central bank’s “ability to perform important statutory functions at a time of economic upheaval,” Fed lawyers have said in legal filings.
David Skidmore, a Fed spokesman, declined to comment.
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