"The Senate must condition its support for Fed Chairman
Ben Bernanke on compliance with this court ruling. Without
transparency in the Federal Reserve, there will be no assurance
that any of the root causes of the financial crisis—which the Fed
caused—will be addressed."—ALG President Bill Wilson.
August 26th, 2009, Fairfax, VA—Americans for Limited Government President Bill Wilson today in a letter strongly urged members of the U.S. Senate to place holds on and to condition support for the reappointment of Federal Reserve Chairman Ben Bernanke on compliance by the Fed to a recent ruling by a federal district court ordering the Federal Reserve to disclose the details and recipients of some $2 trillion in loans the central bank made in 2008.
On Monday, the Southern District Court of New York ordered that the Federal Reserve Board of Governors comply with Bloomberg News' Freedom of Information Act (FOIA) request to produce the details of some $2 trillion in emergency loans that were made by the nation's central bank in 2008. This includes who received the $2 trillion of loans, the terms under which they were received, and what collateral was taken by the Reserve branches in exchange for the loans.
"The Senate must condition its support for Fed Chairman Ben Bernanke on compliance with this court ruling," Wilson said in a statement, adding, "Without transparency in the Federal Reserve, there will be no assurance that any of the root causes of the financial crisis—which the Fed caused—will be addressed."
District Judge Loretta Preska ordered that the Board must produce the 231 pages of documents within 5 business days. Also, the Board must search for records relevant to the request that constitute "Records of the Board" held by the New York Federal Reserve by September 14th.
Wilson said that Federal Reserve compliance with the court's decision would "begin to shed some much-needed light on the Fed's unprecedented moves that threaten to bankrupt the nation."
Wilson wrote that "Since the financial crisis hit, the Federal Reserve has been engaged in an unprecedented response about which little is known but will most certainly lead to more asset bubbles and inflation," including $7.76 trillion in bailouts. These efforts included the $2 trillion in undisclosed loans.
In his letter, Wilson wrote, the financial crisis was in large part caused by the Federal Reserve. "Fed policy directly caused the lethal combination of easy money accommodating the spike in housing that artificially inflated demand for housing, the expansion of the securities trade as led primarily by Fannie Mae and Freddie Mac that was able fuel on the fire, and which in turn led to the derivatives trade run by AIG."
"None of the policies by the Fed that caused the crisis have been addressed. Unless the Federal Reserve is reined in and its activities made completely transparent, the sorts of financial calamity that plagued the nation in 2008 will most certainly happen again," Wilson warned in conclusion.
"Backgrounder on Bernanke Reappointment and Record," Americans for Limited Government, August 2009.