Federal Reserve Chairman Ben Bernanke has instituted "a thorough review" of the central bank’s disclosure policies, Bloomberg News reported Tuesday.
Amid concerns about the "worse credit crisis in seven decades," Bloomberg notes, "The Fed hasn’t disclosed many of the assets and participants in its programs."
"We at the Fed have begun a thorough review of our disclosure policies and the effectiveness of our communication," Bernanke said in remarks prepared for testimony before the House Financial Services Committee, according to Bloomberg.
The review panel, led by Board Vice Chairman Donald Kohn, will have a "presumption" that the public has a right to know more about the inner workings of finance, Bernanke said, adding that nondisclosure of information must be affirmatively justified by clearly articulated criteria for confidentiality." A Web site with more detailed information on the Fed’s lending efforts is in the works, Bloomberg said.
As Washington Post columnist David Ignatius observed, "Transparency is not a natural instinct for those who regulate financial markets. The minutes of Fed meetings were once kept secret, on the theory that the markets would be spooked by details of the deliberations."
"Bernanke said disclosing information about banks involved in the Fed’s lending efforts would ‘destroy the program’," The Associated Press reported. Bernanke also said inadequate communication with Congress and the public marred the doling out of the first $350 billion of the bailout.