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Fed, news service argue IDing banks that got emergency loans
By Mark Pittman
Bloomberg News
Monday, October 5, 2009
http://www.bloomberg.com/apps/news?pid=20601109&sid=aPXkf9Z0xZ4A
NEW YORK -- The Federal Reserve should be forced to identify companies that received loans from the central bank because it can' demonstrate that borrowers would be harmed by the disclosure, according to lawyers who won a Freedom of Information Act lawsuit.
The details sought by the Bloomberg News unit of Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, aren't proprietary, attorneys for the company said today in a court document opposing the Fed's request for a court to halt disclosure of information while an appeal proceeds.
Bloomberg won a ruling from Manhattan's chief federal judge on Aug. 24 affirming the right of U.S. taxpayers to know about the financial firms that borrowed money. Total lending by the Fed, which last year began extending credit directly to companies that aren't banks for the first time since it was created in 1913, was $2.12 trillion on Sept. 30.
Divulging specifics about the loan program might touch off a run by depositors, unsettle shareholders, and hurt the central bank's "ability to perform important statutory functions at a time of economic upheaval," Fed lawyers have said in legal filings.
Details about the borrowers and their collateral are "central to understanding and assessing the government's response to the most cataclysmic financial crisis in America since the Great Depression," attorneys for Bloomberg said in the suit.
The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg suit didn't seek money damages.
Bloomberg filed its response today to the Fed's motion to keep the borrower information confidential while it seeks to overturn the Aug. 24 ruling in the U.S. Court of Appeals in New York, according to Thomas Golden, a lawyer at New York-based Willkie Farr & Gallagher LLP, who represents the company.
Today's filing couldn’t be immediately confirmed in court records.
The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).
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