The Treasury has committed itself to a policy of openness in the funds it lends as part of the bailout, but concern is prevalent about the lack of openness around the Federal Reserve's lending. Is the Fed open enough? If not, what needs to change? If so, why should the Fed not become more open?
Here are the thoughts from this week's experts:
Dean Baker, CEPR
Why Does the Fed Operate in the Dark? »
Anthony Gregory, Campaign for Liberty
Seeing Through the Federal Reserve »
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New Website Section, Still Need Transparency
The Fed's website now includes a section entitled, "Credit and Liquidity Programs and the Balance Sheet." (http://www.federalreserve.gov/monetarypolicy/bst.htm) The site provides an overview of all the Fed's special lending facilities, an explanation of their terms, as well as some good visuals depicting the unprecedented expansion of the Fed's balance sheet.
On the one hand, the website is a good sign that the Fed is at least listening to the calls for more openness and transparency regarding its lending activities. However, the new section still does not disclose the actual individual recipients of Fed money or exactly how much they received. The Fed has been able to keep this information secret, even in the face of Bloomberg's FOIA request. Until this information is disclosed, the activities of the Federal Reserve and the trillion-dollar expansion in its balance sheet will still lack fundamental transparency and openness.
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