Bloomberg sues Fed over collateral disclosure

11 November 2008

Bloomberg is suing the US central bank, the Federal Reserve, under the Freedom of Information Act to force it to disclose which securities it has accepted as collateral against $1.5 trillion worth of loans to banks including Citigroup, Morgan Stanley and Goldman Sachs.

The business news service filed its lawsuit in the southern district court of New York yesterday (November 10th), ABC News national correspondent Jake Tapper reported.

Court papers show the funds Bloomberg is asking about were lent to banks through 11 programs in all, such as the Fed's discount window, the Primary Dealer Credit Facility and the Term Securities Lending Facility.

The loans do not include the $700 billion bailout package approved by Congress in September.

In its filing, Bloomberg said the documents it seeks are "central to understanding and assessing the government's response to the most cataclysmic financial crisis in America since the Great Depression".

Bloomberg editor-in-chief Matthew Winkler commented that taxpayers have a right to know the "risks, costs and methodology" behind the government's rescue of the financial sector.

The company added it had previously asked the Fed to disclose the collateral on May 21st and October 25th.

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