Via Reuters: Fed to work with lawmakers on naming borrowers
Fed says time lag would be needed to avoid disruption
Fed official says ‘giving serious consideration’ to idea
Barney Frank:
“I do believe it’s important that there be a time lag before information is released about who bought what, and who went where, so that you — this does not become information on which people act in the market,” Frank said.
“I would say, however, that that’s different from saying that after a suitable time period, so that there won’t be this market effect, you don’t have a right to go to a federal agency, borrow money and keep it secret forever,” added Frank, a Massachusetts Democrat.
Frank said he wanted to incorporate elements of the Fed audit bill, proposed by Texas Republican and frequent Fed critic Rep. Ron Paul, into broader financial regulatory reform legislation under consideration in Congress this fall.
Scott Alvarez, the Fed’s general counsel:
Later in the hearing, however, Alvarez said he had concerns that institutions would use Fed lending facilities less if their identities were disclosed. There was a danger that some healthy banks borrowing from the Fed could be stigmatized, he said.
“The concern is that borrowers in those facilities, if their names were disclosed, would be viewed by the public incorrectly as institutions that are troubled, because we have also lent in other ways to troubled institutions,” such as Bear Stearns and American International Group, he said.
“And so because we do help troubled institutions and those that are not troubled, the concern of those that are not troubled is they’ll be lumped in with the troubled ones.”