Treasury Secretary Paulson promised transparency when he came to Congress begging for a bailout of the financial sector. Now, though, the Fed is resisting attempts to find who is getting the billions of dollars taken out of the pockets of American taxpayers:
Taxpayers deserve to know where their money is going and what is being done to safeguard it. Emergency loans are supposed to be paid back with interest. The Fed isn’t supposed to be offering money to banks without adequate collateral. Unfortunately, in September the Fed announced wider standards to accept less-than-top-rated assets as collateral.
The banks accepting emergency loans would like to keep it a secret because disclosure might give investors reason to doubt their financial soundness. Some would argue that’s the point.
In its story, Bloomberg News goes to Barney Frank for “informed” opinion. Considering his role in this disaster, that’s a little like consulting with Richard Speck on student-nurse security.
