The Federal Reserve has been ordered to reveal the names of companies that received emergency loans during the financial crisis, after losing a Freedom of Information Act lawsuit brought by Bloomberg News. (Check out Bloomberg's full story here.)
Here are the crucial details of Bloomberg's report from earlier this morning:
"The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. "
Of the approximately $2 trillion in Fed assets as of last September, it's unclear just how much of that amount went to the Fed's emergency loan program, which marked an unprecedented entry by the Fed into the mortgage-backed security market. Here's more from Bloomberg:
"The Fed's balance sheet about doubled after lending standards were relaxed in the wake of the collapse of Lehman Brothers Holdings Inc. on Sept. 15, 2008. For the week ended Aug. 19, Fed assets rose 2.3 percent to $2.06 trillion as it continued to buy mortgage-backed securities under a program allowing the central bank to purchase non-government securities for the first time."
"Remember, the Fed fought against releasing the names of the banks that got an indirect bailout from the federal government's rescue of American International Group. And the Fed has been less then forthcoming in providing information about the $30 billion in ailing assets it took on from Bear Stearns as part of the forced sale of the failing investment bank to JPMorgan Chase."
READ yesterday's ruling below. Notice anything interesting in the below document? Let us know in the comments section.