About friggin' time, too:
"My question to you is, will you tell the American people to whom you lent $2.2 trillion of their dollars?" Sanders asked, referring to the size of the Fed's balance sheet.
Bernanke wouldn't, so....
According to the text of the proposed legislation, e-mailed by Sanders' staff, he wants the central bank to identify any firm that has received financial assistance since March 24, 2008, including details on the type of borrowing, amount, date, terms and the Fed's rationale for lending.
Sanders wants the Fed to publish those details on its website and update them at least every 30 days.
Now, let's be clear; this is NOT the TARP money. That is accounted for, and is public record. I have a previous diary on that subject. You'll find the Treasury's most recent TARP report here.
The money Sanders is referring to is loans the Fed has made outside the TARP program. Bernanke says the loans are "over-collateralized," but opted not to disclose anything more about them, citing the "stigma" attached to receiving such loans. To that, I have only two comments.
First, what stigma? The market is now assuming that every financial firm is in deep doo-doo. If anything, knowing which firms are receiving help and which are not removes one of the biggest uncertainties out there. It might actually improve the markets.
Second, what collateral? If we've learned anything at all over the last few months, it's that the value of pretty much everything is not what it might seem. That collateral is OUR collateral, Mr. Bernanke. Let us collectively be the judge of whether or not it's adequate.
I'm with Bernie. This is the important piece of information being withheld from us. We actually have a pretty good idea of where we stand with the likes of AIG, Citigroup, et al. This piece -- all $2.2 trillion of it -- is the part they're not telling us. Let's give Bernie props and support and get a bill passed.
UPDATE: Thanks for the boost to the list. I had to leave for a while, but I see the discussion zoomed along just fine without me :-)
A couple of comments. The disconnect between Sanders and Bernanke is over the size of the lending, not its existence. The Fed routinely provides short-term lending to grease the wheels of the financial system -- in other words, to provide liquidity to financial institutions. Although he doesn't say it, I doubt Sanders is concerned about that. Instead, Sanders is seeing a sizable increase in the lending and no data on the change. If Bernanke had said that this money is still part of the routine "overnight window" lending, I think Sanders would have backed off. It's telling that Bernanke did not do so, IMHO.
At a minimum, the Fed should provide information on the duration of the loans and the nature of the collateral. That said, I still don't think disclosure should be stigmatizing, provided enough historical data is included to give it context.
You'll find video of the exchange in the comments, courtesy of ItsSimpleSimon.