The Federal Reserve should identify U.S. banks funded by its emergency lending because taxpayers are “involuntary investors” who need to know the risks, Bloomberg LP said today in a court filing.
The Fed refuses to name the borrowers, the amounts of loans or assets banks put up as collateral under 11 programs, arguing that doing so might set off a run by depositors and unsettle shareholders. Bloomberg, the closely held New York-based company majority-owned by Mayor Michael Bloomberg, sued Nov. 7 under the Freedom of Information Act on behalf of its Bloomberg News unit.
“The Board’s arguments are based on wispy speculation, lack evidentiary support and are contradicted by economic theory,” said Thomas Golden and Jared Cohen, lawyers with New York-based Willkie Farr & Gallagher LLP, in a motion asking the judge to require disclosure. “These government actions, which have been shrouded in secrecy, are at the heart of Bloomberg’s FOIA requests.”