Why is the Federal Reserve hiding information about the banks?
The Federal Reserve is hiding information about our banking system. Why?
In our last post, we referred to a recent court ruling that ordered the Federal Reserve to provide Bloomberg LP, the financial information company, information about which banks are participating in the Fed's emergency lending program. The government defends the Fed's desire to hide this information. They support the claim that if people knew which banks participate in the emergency lending program, they would withdraw their money from those banks. In other words, it would cause a "run" on those banks. Bloomberg says neither the Fed nor the government can make this claim.
(A "run" occurs when many people decide their money isn't safe in a bank and they take their money out. Because U.S. banks have FDIC insurance protecting bank accounts up to $250,000 at the moment, the risk of a run on any individual bank is much less than it would have been in the past.)
In addition, Bloomberg states that the American people have become "involuntary investors" in certain banks and have a right and need to know what is being done with their money.
Remember that the money being lent to the banks is, in the end, taxpayer money. It's the people who ultimately are backing up these banks. And it's not just banks. The list of institutions includes AIG, the giant insurance company.
These companies didn't manage their affairs well enough, so now they need rescuing. We, the people, have been put in the position of rescuing them. We have a right to know who they are and what they're doing with our money.
Back in 1931, the Treasury Department, which at that time audited banks, told its examiners to be "lenient" during their audits. They were hiding information from the American people then, too. In my next post, I'll talk about this in more detail.
Right now, the Federal Reserve has not complied with the court's decision. They are considering an appeal.
I asked at the end of our last post why the Fed is hiding information from us about its own operations. Now I think it's appropriate to ask why is the Federal Reserve hiding information about these banks?
In our last post, we referred to a recent court ruling that ordered the Federal Reserve to provide Bloomberg LP, the financial information company, information about which banks are participating in the Fed's emergency lending program. The government defends the Fed's desire to hide this information. They support the claim that if people knew which banks participate in the emergency lending program, they would withdraw their money from those banks. In other words, it would cause a "run" on those banks. Bloomberg says neither the Fed nor the government can make this claim.
(A "run" occurs when many people decide their money isn't safe in a bank and they take their money out. Because U.S. banks have FDIC insurance protecting bank accounts up to $250,000 at the moment, the risk of a run on any individual bank is much less than it would have been in the past.)
In addition, Bloomberg states that the American people have become "involuntary investors" in certain banks and have a right and need to know what is being done with their money.
Remember that the money being lent to the banks is, in the end, taxpayer money. It's the people who ultimately are backing up these banks. And it's not just banks. The list of institutions includes AIG, the giant insurance company.
These companies didn't manage their affairs well enough, so now they need rescuing. We, the people, have been put in the position of rescuing them. We have a right to know who they are and what they're doing with our money.
Back in 1931, the Treasury Department, which at that time audited banks, told its examiners to be "lenient" during their audits. They were hiding information from the American people then, too. In my next post, I'll talk about this in more detail.
Right now, the Federal Reserve has not complied with the court's decision. They are considering an appeal.
I asked at the end of our last post why the Fed is hiding information from us about its own operations. Now I think it's appropriate to ask why is the Federal Reserve hiding information about these banks?
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