Federal Reserve Must Disclose Bank Bailout Records According to Appeals Judge

March 22, 2010 by · Leave a Comment
Filed under: Legal News 

This is good news no matter what material effects is has on the banks.  The federal reserve being our agent to issue our currency has an obligation to the America citizen first and foremost over any to the banks they serve as the lender of last resort.  If they have the prerogative to issue any amount of our currency to bailout out any bank for any reason they deem necessary then de-facto our freedom has been subverted a tiny bit.

We founded this country on religious, political and economic freedom and having the ability to know where our money goes is “key” to that freedom.  At the end of the day, what we are going to learn is that some major banks made some major bets and they had to go hat in hand to the Fed to stay solvent.  If the markets deems that as a lost of confidence in their prudence and make a run on the bank to put it out of business, SO BE IT.  That is our market system working and it will show notice to other banks that if they are not prudent they can share the same fate.

Bloomberg – The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.

The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.

The Fed had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. A three-judge panel of the appeals court rejected that argument in a unanimous decision.

The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”

The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.

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