Imperium Watch: Banks, Soundproof No More

U.S. Sen. Bernie Sanders of Vermont calls out the Federal Reserve for coddling the country's biggest lenders.

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Thursday, March 26, 2009

Bernie Sanders, the democratic socialist U.S. senator from up the way in Vermont, has a refreshing way of talking turkey to and about the big banks.

Sanders recently had a set-to with Federal Reserve Chairman Ben Bernanke because Bernanke wouldn't tell Congress which banks have received federal aid outside the TARP bailout.

"Will you tell the American people to whom you lent $2.2 trillion of their dollars?" Sanders demanded at a Senate Budget Committee hearing.

Bernanke told Sanders he wouldn't give the names of the banks because having their names made public would make them feel stigmatized. Then, he said, they might be reluctant to borrow from the Federal Reserve.

(Question: would that be such a bad result? Maybe knowing that they couldn't borrow without making their identities known to the public that put up the money would make them quit pulling capers like buying and selling unsecured debt.)

Sanders said just what most Americans would have said: Too bad. To open the workings of the Federal Reserve to public view, he's pushing a bill called the Federal Reserve Transparency Act. (A bill with a similar name is being promoted in the House by Representative and former presidential candidate Ron Paul, who wants the Fed to be audited and the results of the audits to be made available to Congress.)

Sanders would use the legislation to create a website with the names of banks that have borrowed from the Federal Reserve since March 24, 2008, the amount of aid they got, the terms of each loan and the Fed's "specific rationale" for making it. This information, Sanders said, should be updated at least every 30 days.

Sanders said he had cash-strapped businessmen in his state who couldn't borrow from the Fed and damned well wanted to know who could. "I have a hard time understanding how you have put $2.2 trillion at risk without making those names available, those institutions public," Sanders said, adding that the secrecy was "unacceptable."

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