Tuesday, August 25, 2009

Fed Loses Suit Over Lending Programs’ Transparency

The Federal Reserve has not disclosed the names of the financial institutions it has lent billions to through special programs launched in the midst of the financial crisis.

Bloomberg News sued the Fed for more details on these loans: which companies had received them and how much they’d received. In a ruling Monday in U.S. District Court in Manhattan, Judge Loretta Preska sided with Bloomberg. The Fed’s main argument that it couldn’t release the names of its borrowers because it would signal a bank’s weakness to the market, didn’t fly with the judge.

The judge gave the Fed five days to turn over its documents, but it could appeal the decision. An appeal seems likely, given that last month the Fed won a similar suit brought by Fox News (before a different judge), reports ProPublica.

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