The Fed Partially Lifts the Veil on Its Discount Window

For most of its 98-year history, the Federal Reserve has operated with all the transparency and enthusiasm for change of the Vatican. Now the ultra-secretive Fed is starting to alter its ways, if somewhat grudgingly. Some of the new openness, such as Chairman Ben Bernanke's plan for quarterly press briefings, is the central bank's idea. Much of it comes under duress.

On Mar. 31 the Fed was expected to disclose which banks borrowed from its discount window during the darkest moments of the 2008-09 financial crisis. This unprecedented view of the emergency loans the Fed extended to hundreds of banks is the result of a Mar. 21 Supreme Court decision that left intact lower court rulings ordering disclosure in lawsuits filed by Bloomberg, the owner of this magazine, and News Corp.'s (NWS) Fox News Network. Still, the Fed won't disclose the collateral it accepted, which would reveal the risks it took. Future discount window borrowings will be made public, though only after a two-year delay, thanks to the new Dodd-Frank financial reform law.