Feds Won’t Say Where $2 Trillion Is Going

Published January 1, 2009

Federal officials have declined to say where $2 trillion of emergency loans are going or what collateral is being used to secure the loans.

Bloomberg News, a financial reporting news service, sued the federal government in early November under the Freedom of Information Act to try to pry out the information. On November 10, the Federal Reserve declined to say which institutions are receiving the money or describe the assets that back the borrowings.

“The collateral is not being adequately disclosed, and that’s a big problem,” Dan Fuss, who manages $17 billion in bonds for Boston-based Loomis Sayles & Co., told Bloomberg. “In a liquid market, this wouldn’t matter, but we’re not. The market is very nervous and very thin.”

The government has loaned the money to keep credit markets flowing.

— Steve Stanek