Looking Through the Discount Window: The Fed (Finally) Releases Lending Data
A year and a half after the process began, Bloomberg finally got its hands on the Fed discount window lending data it wanted.
[Supreme Court] justices left intact lower court orders that said the Fed must reveal documents requested by Bloomberg related to borrowers in April and May 2008, along with loan amounts. The late Bloomberg News reporter Mark Pittman asked for the records under the Freedom of Information Act, which allows citizens access to government papers. News Corp.’s Fox News Network LLC filed FOIA requests for similar information on loans made from August 2007 to March 2010.
Former Fed officials, lawyers representing the central bank, and even some Fed watchers have expressed concern that revealing the names of discount-window borrowers could keep banks away from the facility in the future.
“I am concerned that in the next crisis it will be more difficult for the Federal Reserve to play the traditional role of lender of last resort,” said Donald Kohn, former Fed vice chairman and senior fellow at the Brookings Institution in Washington. “Having these names made public, or the threat of having them made public, could well impair the efficacy of a key central bank function in a crisis -- to provide liquidity to avoid fire sales of assets -- because banks will be reluctant to borrow.”
The best part of the entire article is this Jamie Dimon threat, in which he clearly expresses his distaste for the discount window, as if he's somehow above it. We all know Dimon doesn't need a damn discount window, he gets his cheap easy money in Fed firesales of Bear Stearns silver positions like any self-respecting banker would:
“I think it will make it harder for people to use the discount window in the future,” Jamie Dimon, chairman and chief executive of New York-based JPMorgan Chase & Co. (JPM), the second- biggest U.S. bank by assets, told reporters yesterday after a speech in Washington. “We never intend to use the discount window.”
But the very best paragraph of all is this, also from Bloomberg (slash Business Week) but a different article. Are you fucking kidding me?
Americans can take comfort knowing that Congress and the courts affirmed what may prove the most reassuring legacy of the worst financial disaster of our time: The Federal Reserve is the people’s bank and obligated to share what it knows and does with the citizenry it serves.
The citizenry it serves?! I just threw up in my mouth a little bit.
Recommended supplemental reading: The Dirty Fed Loses One More in the War Against Transparency