There was recently a lawsuit against the U.S. Federal Reserve by Bloomberg News in which the Fed refused to release the names of the banks that participated in an emergency lending program and the amount of money that they received. Last week, Chief Justice Loretta Preska of the US District Course in Manhattan ruled against the Federal Reserve and insisted that the Fed release the information under the Freedom of Information Act as Bloomberg News requested, but the Federal Reserve hasn’t given up just yet.
On Wednesday, U.S. Federal Reserve officials asked the judge not to enforce the order to release the names of the banks that participated in its emergency lending programs and the amount of money that they received, citing that a disclosure of that information would significantly threaten the companies that participated in the program and the economy as a whole.
Justice Preska stated that the Federal Reserve had failed to show how revealing the names and amounts of money given to each bank would result in “imminent competitive harm.” The Federal Reserve has asked for a stay on the order while the Fed readies to file an appeal.
The central bank released the following statement to the press, “Immediate release of these documents will cause irreparable harm to these institutions and to the board’s ability to effectively manage the current, and any future, financial crisis.”
The Clearing House, LLC, which is an agency that represents banks, filed a motion of a support in the Fed’s call for delaying, stating that additional speculation about the liquidity of certain banks could cause runs on deposits and cause trading partners to demand additional collateral. The Clearing House represents major institutions such as Bank of America, Citigroup, HSBC, Wells Fargo and JP Morgan Chase.
