The Fed and U.S. banks would suffer irreparable harm if details of the loan programs were made public, according to the central bank’s senior counsel, Yvonne Mizusawa.
By Daniel at 27 August, 2009, 9:19 am
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A judge in Manhattan has ordered the Federal Reserve to turn over records related to $2 trillion worth of loans handed out willy-nilly to financial institutions. The Fed has previously refused to provide the information, based on a request from Bloomberg. However, because the Fed uses taxpayer money in its operations, the judge ruled that taxpayers were entitled to know how that money was used. A quote from Bloomberg on this latest development…
Bloomberg said in the suit U.S. taxpayers need to know the risks behind the central bank’s $2 trillion in lending because the public is an “involuntary investor” in the nation’s banks.
The Federal Reserve’s balance sheet about doubled beginning in September to more than $2 trillion because of a historic attempt to rescue financial institutions. For the week ended Aug. 19, Fed assets rose 2.3 percent to $2.06 trillion as the central bank bought more mortgage-backed securities. Non- government securities were allowed to be purchased by the Fed for the first time.
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