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WASHINGTON – The Federal Reserve released details today about $2.3 trillion in new lending and asset-purchase measures intended to stabilize the economy. The announcement solidifies the central bank’s foray into decidedly new territory -- including lending to small and mid-sized businesses for the first time in history and expanding corporate lending and debt buy-back programs to include riskier classes of corporate debt.
In response, U.S. PIRG Tax and Budget advocate R.J. Cross released the following statement:
“Never before, not even during the Great Recession in 2008, has the Federal Reserve directed so much money to help so many companies so quickly. Its unprecedented efforts may prove essential. But with unprecedented power comes unprecedented responsibility to inform and engage the public.
For the Federal Reserve, operating without much public disclosure or accountability has long been standard operating procedure. But as the Fed begins leveraging the $454 billion bailout fund in the CARES Act into as much as $4.5 trillion in lending, Americans need more transparency.
In particular, we need to know which corporations are benefiting from the Fed buying their debt. That transparency is essential if we want to keep the biggest bailout in U.S. history from becoming a special interest free-for-fall. It’s also essential now that the Fed is purchasing riskier forms of debt, including junk bonds that were excluded from past bailouts.
In these unprecedented times, a spreadsheet on a bureaucrat's computer is not enough to satisfy the public’s need to know. Americans must demand that all money lent and spent be disclosed online. The Federal Reserve must divulge the names of companies receiving assistance and the terms of those deals, and post that information online in a timely way for all to see.
It’s crucial that citizens, watchdogs and elected officials know how these historic sums of money are used. The biggest bailout in U.S. history deserves the most transparency in U.S. history. Nothing could be clearer than that.”
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