Transparency and the Federal Reserve

[Gan]

Nov. 12 (Bloomberg) -- House Republican leader John Boehner (http://search.bloomberg.com/search?q=John+Boehner&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) called for the Federal Reserve to disclose the recipients of almost $2 trillion of emergency loans from American taxpayers and the troubled assets the central bank is accepting as collateral.

Boehner, in a prepared statement, also asked the Federal Reserve to comply with a Freedom of Information Act request seeking details about the loans.

The Fed ``should comply with this Freedom of Information Act request, and in the interest of full and fair disclosure, they must begin providing lawmakers and taxpayers all information about how they are using federal tax dollars,'' Boehner said.

Fed Chairman Ben S. Bernanke (http://search.bloomberg.com/search?q=Ben+S.+Bernanke&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) and Treasury Secretary Henry Paulson (http://search.bloomberg.com/search?q=Henry%0APaulson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, there is little disclosure about how the programs are being implemented.

Bloomberg News requested details of the Fed lending under the U.S. Freedom of Information (http://www.usdoj.gov/oip/) Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

A spokesman for the Federal Reserve didn't immediately respond to requests for comment.

`Oversight, Transparency'
Boehner said he is increasingly concerned that the government's actions to add stability to financial markets is moving into areas that were not the stated intention when Congress approved $700 billion for a Treasury-administered program to bail out the financial sector that is being weighed down by the housing crisis.

``During the bipartisan negotiations between Congress and the administration, members of both parties made clear that Congress must have meaningful oversight over the use of taxpayer dollars,'' Boehner said. ``Transparency is even more important now, given that the program appears to have been implemented in some ways that were given little to no discussion as Congress was being urged to pass the rescue plan.''

Senator John Cornyn (http://search.bloomberg.com/search?q=John+Cornyn&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) of Texas, a member of the Republican leadership, said the lack of disclosure ``should trouble taxpayers and policymakers alike.''

``There cannot be accountability in government and in our financial institutions without transparency,'' he said. ``Many of the financial problems we are facing today are the direct result of too much secrecy and too little accountability.''

Representative Scott Garrett (http://search.bloomberg.com/search?q=Scott+Garrett&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a New Jersey Republican who serves on both the Financial Services and Banking committees, said ``it's impossible to get to the bottom of where we are because we don't have transparency.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=axpH4Qil0NT8&refer=worldwide
__________________________________
/Agreed

[Warriorbird]

2 Trillion dollars in loans. Hmm...

[Seran]

They really need to stop calling it the $700 billion dollar bailout and call it the Bush-Paulson Corporate Entitlement Giveaway.

[Mabus]

They really need to stop calling it the $700 billion dollar bailout and call it the Bush-Paulson Corporate Entitlement Giveaway.
Bush and Paulson were not in the Congress that approved the money.

Only Congress can appropriate funds.

[Warriorbird]

Only Democrats voted for it. Really!

[Mabus]

Only Democrats voted for it. Really!
Can you point to where someone said this?

[Mabus]

Your subtext was clearly that it was the evil Democratic Congress's responsibility and not Bush or Paulson's at all.
There was no subtext. Read the actual post.

Congress appropriates funds. Congress. Not a party, Congress.

Even McCain voted for the bill.

[Gan]

Your subtext was clearly that it was the evil Democratic Congress's responsibility and not Bush or Paulson's at all.

Yes, because when you lack an actual quote, you can create shit up by using the excuse... "your subtext really meant"

Just stop posting stupid. And quit trying to play agent provacateur.

[Parkbandit]

Your subtext was clearly that it was the evil Democratic Congress's responsibility and not Bush or Paulson's at all.

So now you are able to determine what people are posting, without them actually posting it?

Awesome

[Seran]

While you are correct about the appropriations, you've conveniently forgotten that both Bush and Paulson have championed this bailout from the very start. Throw in the help of Bernake and some unscrupulous bribes implanted into the bill got some morally ambiguous Repubs to sign off on it.

[Parkbandit]

While you are correct about the appropriations, you've conveniently forgotten that both Bush and Paulson have championed this bailout from the very start. Throw in the help of Bernake and some unscrupulous bribes implanted into the bill got some morally ambiguous Repubs to sign off on it.

Are you for real? Seriously?

I see you conveniently forgot that Obama, Pelosi and Reid also championed this bailout from the very start.

[Gan]

So now you are able to determine what people are posting, without them actually posting it?

Awesome
http://hunternuttall.com/blog/wp-content/uploads/2008/07/johnny-carson.jpg

Thought you knew...

[Gan]

They really need to stop calling it the $700 billion dollar bailout and call it the Bush-Paulson Corporate Entitlement Giveaway.


While you are correct about the appropriations, you've conveniently forgotten that both Bush and Paulson have championed this bailout from the very start. Throw in the help of Bernake and some unscrupulous bribes implanted into the bill got some morally ambiguous Repubs to sign off on it.

LOL

[Seran]

Are you for real? Seriously?

I see you conveniently forgot that Obama, Pelosi and Reid also championed this bailout from the very start.

I never said that they weren't to blame, merely pointing out a fact that Mabus seems to forget everytime he opens his cake hole.

[Warriorbird]

So now you are able to determine what people are posting, without them actually posting it?

Awesome

I'm almost to your level.

[Parkbandit]

I never said that they weren't to blame, merely pointing out a fact that Mabus seems to forget everytime he opens his cake hole.


Which is EXACTLY what you did.

[Seran]

Which is EXACTLY what you did.



So now you are able to determine what people are posting, without them actually posting it?

Awesome

I think this is sad that you proved WB right about your own hipocracy so quickly.

[Mabus]

I never said that they weren't to blame, merely pointing out a fact that Mabus seems to forget everytime he opens his cake hole.
Why the attack? Why when I respond with facts is my response from a "cake hole"?

Of course Paulson requested the money, and of course he is a member of the Bush administration. But attempting to lay the whole bill solely at the feet of just the administration is a convenient method of leaving out those that also made the bailout happen; Congress.

It is about time the "blame Bush" crowd left their animosity behind. Start a countdown toward the inauguration. Plan a party. GW only has 2 months, 9 days, 21 hours, 30 minutes and 15 seconds left.

Think of the children!
;)

[Gan]

Why the attack? Why when I respond with facts is my response from a "cake hole"?

Of course Paulson requested the money, and of course he is a member of the Bush administration. But attempting to lay the whole bill solely at the feet of just the administration is a convenient method of leaving out those that also made the bailout happen; Congress.

It is about time the "blame Bush" crowd left their animosity behind. Start a countdown toward the inauguration. Plan a party. GW only has 2 months, 9 days, 21 hours, 30 minutes and 15 seconds left.

Think of the children!
;)

Its just starting to rev back up. Wait until the Bush hearings start in full earnest after the winter break.

[Kembal]

This article from the Post is much better at explanining all the oversight problems in regards to the congressionally authorized bailout.

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/12/AR2008111202846_pf.html


Bailout Lacks Oversight Despite Billions Pledged
Watchdog Panel Is Empty; Report Is Unfinished

By Amit R. Paley
Washington Post Staff Writer
Thursday, November 13, 2008; A01



In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"It's a mess," said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. "I don't think anyone understands right now how we're going to do proper oversight of this thing."

In approving the rescue package, lawmakers trumpeted provisions in the legislation that established layers of independent scrutiny, including a special inspector general to be nominated by the White House and a congressional oversight panel to be named by lawmakers themselves.

Some lawmakers and their aides fear that political squabbling on Capitol Hill and bureaucratic logjams could delay their work for months. Meanwhile, the Congressional Budget Office, which also has some oversight responsibilities, is worried about the difficulty of hiring people who can understand the intensely complicated financial work involved.

The legislation grants the special inspector, who is expected to be the primary overseer of the program, a budget of $50 million. The measure calls for him to conduct audits and investigations of how the government spends money under the bailout program, including on equity investments in firms. In particular, he is to report about any assets acquired and their value, plus an explanation of why they were acquired and details on individuals or companies involved in the transactions.

The leading candidate for the post is Neil M. Barofsky, a federal prosecutor in New York, and his nomination could come as soon as this week, according to people familiar with the matter.

Barofsky, an assistant U.S. attorney in the Southern District of New York, is the chief of the office's mortgage fraud group and the lead prosecutor in the $2.4 billion accounting-fraud case against former executives of the collapsed financial firm Refco. He was formerly a white-collar criminal defense attorney in New York.

It is unclear that Barofsky would be confirmed by the Senate, as required, anytime soon. One complicating factor is a battle between the Finance and Banking committees over which has jurisdiction over the confirmation process. Spokeswomen for both panels said the issue has not been resolved and may not be until after President Bush names his choice.

Nonetheless, the finance committee has scheduled a hearing for Monday afternoon in the event that a nominee is named.

Several congressional aides, however, said they did not understand how the Senate could possibly do all the proper vetting for such a critical appointment in just a few days. Thorson's confirmation process, for example, took nearly a year. But Treasury officials and Senate aides worry that if the nominee is not confirmed next week, when Congress is back in town for a lame-duck session, then the process might be delayed well into next year.

Some Republican lawmakers have said they are also concerned that Democrats may avoid acting on the nomination so that Barack Obama can choose his own special inspector general after he becomes president. But people familiar with the matter said Barofsky, the leading candidate for the position, would be palatable to the incoming administration because he supported Obama.

In the meantime, Thorson is trying to oversee the program in addition to his other responsibilities. Treasury Secretary Henry M. Paulson Jr. asked him to take on those duties. Thorson has a few dozen people working on the program, but none are doing so full time. He said there should be at least 100 people in the new special inspector general's office.

Lawmakers from both parties have criticized the White House for not moving more quickly to name an appointee.

"Considering how taxpayers' money around Washington isn't respected, a day shouldn't go by without having an inspector general checking on it," said Sen. Charles E. Grassley (R-Iowa), the ranking member on the Finance Committee.

Tony Fratto, deputy White House press secretary, declined to comment on the nominee or when he or she would be named but said there is adequate scrutiny of the bailout.

"No program in the history of the federal government has had more layers of oversight and reporting and transparency," he said.

For their part, lawmakers have yet to nominate the five-member Congressional Oversight Panel, though leaders of both parties said they hoped they would be named by the end of the month and start work by December. People familiar with the matter said possible nominees included current and former government and industry officials, though some had to recuse themselves because of conflicts of interest.

The panel's mandate is to look at the use of Paulson's authority and the impact of the program on the financial markets and mortgage crisis.

Rep. Barney Frank (D-Mass.), who chairs the House Financial Services Committee, said his concerns about oversight diminished after the Treasury program's focus shifted from purchases of financial firms' troubled assets to capital injections into companies. "The concern was they'd be buying assets and we wouldn't know the price," Frank said. The revised bailout program "doesn't have the conflicts of interest and the other things people were concerned about."

The delays in selecting both the special inspector general and the congressional oversight panel have prevented the release of a detailed oversight report required in the legislation. Under the law, the congressional panel was required to release a report 30 days after the bailout program began, a deadline that has passed. It is supposed to issue a more elaborate report on the financial regulatory process by Jan. 20, a deadline congressional aides said will be nearly impossible to make.

The special inspector general is supposed to release a report within 60 days of his confirmation. Though Thorson, the Treasury inspector general, is not required to prepare a report, he said he might feel obligated to issue one if the Senate does not confirm a special inspector by Monday.

The Government Accountability Office, the investigative arm of Congress, is also required by the legislation to conduct oversight of the program. The agency's mission is to look at the overall performance of the initiative and its effect on the financial system.

The GAO has dedicated about 20 people to look at the bailout and has office space at the Treasury Department. Agency officials said they expect to issue a brief report on the program, as mandated by the legislation, within the next month.

The legislation also created a body called the Financial Stability Oversight Board, whose five members include Paulson and Federal Reserve Chairman Ben S. Bernanke. But it has no staff of its own, and few expect that policymakers can conduct oversight of themselves. "It's sort of a joke in terms of oversight," a congressional aide said.

I find it troubling as hell that the Fed is not releasing the names of which banks are participating in the Fed's relief programs, though I can think of 2 reasons why they're trying not to:

a) Federal Reserve is quasi-executive branch. (not a good reason)
b) Don't want to drive down the stocks of the institutions even more than they already are and cause even worse of a crisis (a slightly better reason, but I think the lack of information leads to rumors that do even worse damage)

Remember, the Fed's program is different from the congressionally authorized bailout. This is banks accessing emergency funding/loans from the Fed, and in exchange they're putting up the mortgage-backed securties and other troubled assets as collateral. The Fed is not buying stakes in the companies.

[Parkbandit]

I think this is sad that you proved WB right about your own hipocracy so quickly.

I think this is sad that you blame others for your clear slanted post. There is a hypocrite here.. but it's you.

[Vyst]

.