Yesterday the FDIC added another 100 or so troubled banks to its “official list” of problem institutions. The problem with these FDIC announcements is that there are actually two lists of banks that taxpayers should be worried about. There is the list just mentioned and then there is this list.
While the FDIC continues closing smaller banks and making noises about the need for more FDIC funding to guarantee the deposits U S banks, the Federal Reserve is openly admitting that that if taxpayers find out how sick the big, systemically “too big to fail institutions” actually are there may be another financial panic. I have written before that there is a big FOIA battle going on between the Federal Reserve and Bloomberg about the release of information that reveals the details of over three trillion dollars in off budget bailouts conducted by the Fed. This from Zerohedge:
The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg’s lawsuit is allowed to proceed unchallenged, let alone if any of the “Audit The Fed” measures are actually implemented.
As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo.
In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity.
(from the bank’s filing) …..“The Clearing House submits this declaration because the Court’s Order threatens to impair the ability of our members to access emergency funds through the New York Fed’s Discount Window without suffering the severe competitive harm that public disclosure of their identity will cause.”
“Our members have accessed the New York Fed’s Discount Window with the understanding that the Fed will not publicly disclose information about their borrowing, especially their identity. Industry experience, including very recent and searing experience, has shown that negative rumors about a bank’s financial condition – even completely unfounded rumors – have caused competitive harm, including bank runs and failures.”
The actual filing is here.
The issue of central bank secrecy has been gaining momentum for years, particularly since Bretton Woods. Taxpayers have a right to know more information in this era of massive bailouts. Will the Obama administration use the occasion of Chairman Bernanke’s
reappointment to demonstrate it’s much vaunted transparency? Ok, stop laughing, that was a rhetorical question.
Fixed the link, had to use another source. But wait, there’s more:
A must read at Clusterstock on the same subject:
Bloomberg sued the Fed to force it to reveal the names of the banks that have dumped all their crap assets onto the Fed’s balance sheet (a.k.a., the taxpayer).
And Bloomberg won!
But the Fed is still refusing to reveal which banks it has secretly bailed out. And the Fed is now appealing the ruling.
The Fed says its refusal to reveal the names is about “competition.” Please.
Paul Kasriel of Northern Trust explains the real reason: The Fed is scared to death that the revelation will trigger another run on some banks
How many plates do they have spinning in Washington now?