Pulling back the curtain at the Fed

On the same day that Fed chief Ben Bernanke was nominated for a second term at the central bank, developments in two ongoing stories set the stage for what could turn out to be a surprisingly interesting confirmation process. Bloomberg has details on both in this report.

The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.

Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders.

While this may not be the last word on this particular topic, Bloomberg seems to be having much greater success than Fox News did earlier in the year.

But, regarding the upcoming rendezvous between Bernanke and elected officials in Congress, recent developments in the "Audit the Fed" bill sound even more tantalizing.

The U.S. House may vote as soon as next month on a bill to require the Fed to submit to audits by the Government Accountability Office, said Representative Scott Garrett, a New Jersey Republican on the Financial Services Committee.

The judge’s ruling “is strikingly good news,” Garrett said. “This is what the American people have been asking for.”

Stay tuned...