July 06, 2009

Banking industry experts are warning about the economic dangers of U.S. lawmakers making confidential Federal Reserve information public. The concern is legitimate. At this time of uncertainty in credit markets, Congress should not do anything to put a chill on transparency between regulators and banks.The release of private e-mails among Fed officials by the House Committee on Oversight at a hearing last month made for great headlines.

This was especially the case in regard to communications between Chairman Ben S. Bernanke and Richmond Federal Reserve President Jeffrey Lacker on Bank of America's threat to call off the purchase of Merrill Lynch & Co. But former regulators and banking sector watchers say that exposing the traditionally confidential interchanges could lead lenders to share less information with regulators, according to Bloomberg.