Big Banks sue to keep bailout terms secret

The bailout is a gift that just keeps on giving.  I think I misspoke.

There is a new court case that you need to pay attention to, Bloomberg LP v. Board of Governors of the Federal Reserve System.

After we bailed out Wall Street to the tune of $2Trillion, the big banks took taxpayer money and kept quiet on the terms.  The court then decreed that they had to disclose the terms, but the Clearing House Association of America an association of financial institutions, is threatening to go all the way to the Supreme Court to stop that from happening. 

These same people are now pocketing hundreds of billions thanks to the same steep curve which results in $10 billion of new US debt every day.  The Fed is virtually giving the banks the key to the taxpayers vault.

Now they want to keep secret the deal that saved them in the first place, see Bloomberg:
The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.

“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday. “We’re not going to let the Second Circuit opinion stand without seeking a review.”

Regardless of whether the Fed appeals, the Clearing House will take the next legal step by asking for a review by the full appellate court, Saltzman, 49, said at his office in New York. If the ruling is unfavorable, the bank group will petition the Supreme Court, he said.
They claim that it is going to cause a run on the very banks that took the money, but if there was any "collusion, corruption, fraud or abuse", the public has a right to know and prosecute.  The report could be particularly brusing to the US Treasury, the Fed and the banks, especially knowing the revolving door that goes from the Wall Street to gov't, such as Hank Paulson who came from Goldman Sachs or even the current Treasury Secretary Tim Geitner who has also worked for the Fed NY.

So the real question is why the secrecy?  To stop a bank run? or cover up a bank robbery? 
Bloomberg sued in November 2008 under the U.S. Freedom of Information Act, after the Fed denied access to records of four Fed lending programs and a loan the central bank made in connection with New York-based JPMorgan Chase’s acquisition of Bear Stearns Cos. in March 2008.

The New York Times Co., the Associated Press and Dow Jones & Co., publisher of the Wall Street Journal, are among media companies that have signed up as friends of the court in support of Bloomberg.


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