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Injin

Federal Reserve Says Disclosing Emergency Loans Will Hurt Banks

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http://www.bloomberg.com/apps/news?pid=206...id=aAOhgVw78e3U

The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.

The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.

“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,†the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.â€

The Fed’s “ability to effectively manage the current, and any future, financial crisis†would be impaired, according to the motion. It said “significant harms†could befall the U.S. economy as well.

The central bank didn’t say when it would file its appeal.

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders.

Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 under the Freedom of Information Act on behalf of its Bloomberg News unit.

“Our argument is that the public interest in disclosure outweighs the banks’ interest in secrecy,†said Thomas Golden, a lawyer with New York-based Willkie Farr & Gallagher LLP who represents Bloomberg.

Preska’s Aug. 24 ruling rejected the Fed’s argument that the records should remain private because they are trade secrets and would scare customers into pulling their deposits.

“What has the Fed got to hide?†said Senator Bernie Sanders, a Vermont independent who sponsored a bill to require the Fed to submit to an audit by the Government Accountability Office. “The time has come for the Fed to stop stonewalling and hand this information over to the public,†he said in an e-mail.

The Clearing House Association LLC, an industry-owned group in New York that processes payments between banks, filed a declaration that accompanied the request for a stay.

Negative Consequences

“Experience in the banking industry has shown that when customers and market participants hear negative rumors about a bank, negative consequences inevitably flow,†Norman Nelson, vice president and general counsel for the group, said in the document. “Our members have accessed the discount window with the understanding that the Fed will not disclose information about their borrowing, especially their identity.â€

:lol:

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Damnit Injin, you beat me to posting it! Ok, I'll add to this that the FDIC report (Federal Deposit Insurance Co) which was supposed to be released yesterday has been delayed to the 31st as well. They are doing everything they can to hide the parlous state of their finances because they know at this stage how bad they really are.

It will be very interesting to see if disclosure takes place this weekend, I think they will manage to stay it for a bit but I doubt they will be able to keep on suppressing it any further.

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Damnit Injin, you beat me to posting it! Ok, I'll add to this that the FDIC report (Federal Deposit Insurance Co) which was supposed to be released yesterday has been delayed to the 31st as well. They are doing everything they can to hide the parlous state of their finances because they know at this stage how bad they really are.

It will be very interesting to see if disclosure takes place this weekend, I think they will manage to stay it for a bit but I doubt they will be able to keep on suppressing it any further.

Well the problem they have now is that by refusing to release the information, everyone will automatically assume the worst.

The best they can hope for is a partial release of some description, I would hazard.

Or they can just lie of course.

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Well the problem they have now is that by refusing to release the information, everyone will automatically assume the worst.

The best they can hope for is a partial release of some description, I would hazard.

Or they can just lie of course.

I dunno. It's in so many peoples interestes to maintain the illusion. Don't forget that even an investment in a wreck is sound so long as nobody ever admits it's a wreck.

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I dunno. It's in so many peoples interestes to maintain the illusion. Don't forget that even an investment in a wreck is sound so long as nobody ever admits it's a wreck.

Oh sure.

What you do is pretend all is well in public while also dumping the ******er asap in private.

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Oh sure.

What you do is pretend all is well in public while also dumping the ******er asap in private.

I guess so, just that with no information to differentiate on do you leave the sector entirely and miss out, or what? Maybe people just say that the whole thing will be ok because .... er .... it will, and anyway if I diversify then I'm ok because it isn't all garbage.

Also depends to what extent you think the puppeteers hold strings, and that in turn depends on how much tinfoil you have on at the moment.

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Experience in the banking industry has shown that when customers and market participants hear negative rumors about a bank, negative consequences inevitably flow,†Norman Nelson, vice president and general counsel for the group, said in the document. “Our members have accessed the discount window with the understanding that the Fed will not disclose information about their borrowing, especially their identity.â€

rumours or truth

lets just have the truth

or cant they handle the truth

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Well the problem they have now is that by refusing to release the information, everyone will automatically assume the worst.

The best they can hope for is a partial release of some description, I would hazard.

Or they can just lie of course.

And the more they (the FED) say that it will happen, the more likely it is that it will become a self-fulfilling prophecy and the more chance they have of being able to keep the information secret.

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Bump because people should be paying attention to this if they have anything invested in the financial markets.

Also to add the FDIC report is now due for release at 10am EST.

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It's the same argument Mervyn held out for. That central bank support must be covert or it would destroy the bank(s) involved.

The problem with that is that these are publicly traded shares. Either you close them down or you disclose - you can't have it both ways.

If they are forced to disclose before 31st it will presumably be before the markets open again after the weekend.

It's just like the good old days with Paulson's Sunday night bailouts.

Edited by For no one

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I dunno. It's in so many peoples interestes to maintain the illusion. Don't forget that even an investment in a wreck is sound so long as nobody ever admits it's a wreck.

So if I close my eyes after I drive off a cliff it will all be ok?

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Bump because people should be paying attention to this if they have anything invested in the financial markets.

Also to add the FDIC report is now due for release at 10am EST.

priced in already. shares are booming. bonuses means solvency.

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So if I close my eyes after I drive off a cliff it will all be ok?

Gravity doesn't rule in the financial world, so maybe you can just sit there floating. Just keep your eyes closed!

After all, isn't the entire system of money founded on a gigantic lie that depends on nobody opening their eyes?

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Gravity doesn't rule in the financial world, so maybe you can just sit there floating. Just keep your eyes closed!

After all, isn't the entire system of money founded on a gigantic lie that depends on nobody opening their eyes?

See link below. <_<

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