In a victory for both Bloomberg and the American people, the Supreme Court ruled on Monday that the Federal Reserve must disclose the borrowers' names, the amounts of the emergency loans, and the date they took place. The Federal Reserve has five days to comply, and Fed spokesman David Skidmore says they will do so. Of course, Bloomberg is ecstatic.
As a financial crisis developed in 2007, "The Federal Reserve forgot that it is the central bank for the people of the United States and not a private academy where decisions of great importance may be withheld from public scrutiny," said Matthew Winkler, editor in chief of Bloomberg News. "The Fed must be accountable to Congress, especially in disclosing what it does with the people's money."
Ironically, all the arguments put forward by the Federal Reserve's counsel seemed to reinforce the decision that disclosure was necessary. Now the whole world will know which banks were the weakest and required the most help. I have a few of my own suspicions, so I can't wait to see the list.
As for the argument that disclosure will make banks more reluctant to avail themselves of emergency lending when they get in trouble, can someone explain to me why that's a bad thing?
Anyone want to bet on which bank needed the most? How about most frequent visits to the Discount Window? We could get a March Madness pool going for loser banks. Who's with me?