U.S. Senator Bernard Sanders asked Federal Reserve Chairman Ben S. Bernanke for more information about emergency lending programs after the central bank last week released data on 21,000 transactions.
“Much of the information that you provided on your website raises bigger questions than it answers, and some of the information mandated by the law appears to be missing,” Sanders, the Vermont independent who wrote the provision in the Dodd-Frank Act requiring the Fed disclosures, said in a letter to Bernanke dated today.
Sanders asked for copies of correspondence between some board members of regional Fed Banks and Bernanke or any regional Fed bank president. The request covers Fed board members who also served on the boards of firms that received aid or were employed by those firms.
“It is an obvious conflict of interest when CEOs of banks and large corporations who serve on the Fed’s board of directors receive cheap loans from the Fed,” Sanders said in his letter.
Sanders also asked for data on the individual securities pledged as collateral for Fed loans, saying he was “disappointed that the Fed chose not to disclose all of the specific details.”
The Fed on Dec. 1 released data on $3.3 trillion in emergency aid given out during the financial crisis. For three of the Fed’s six emergency facilities, the central bank released information on groups of collateral it accepted by asset type and rating, without specifying individual securities. Among them was the Primary Dealer Credit Facility, created in March 2008 to provide loans to brokers as Bear Stearns Cos. collapsed.
“We have received the letter and plan to respond to it,” David Skidmore, a spokesman for the Fed in Washington, said in an e-mail.
Sanders also asked Bernanke for more information about the central bank’s lending to foreign banks after Fed data showed Zurich-based UBS AG and London-based Barclays Plc ranked among the top users of its emergency programs.
“There are startling examples of massive levels of financial assistance to foreign governments and banks under these programs,” Sanders said in the letter. “At a time when hundreds of thousands of Americans have had their jobs shipped to Mexico, why did the Federal Reserve extend over $9.6 billion to the Central Bank of Mexico?”