A call for disclosure

Federal Reserve officials are considering steps to provide the public with more information about emergency programs aimed at reviving credit and ending the U.S. recession. ┬á People familiar with the matter say the central bank is likely to increase disclosure on the collateral it holds against loans to financial firms, while also weighing a full range of options, including possible press conferences. ┬á The central bank extended its lender-of-last resort role far beyond banks and doubled its balance sheet to more than $2 trillion to stem the credit crisis, leading Chariman Ben Bernanke to push for greater openness at the Fed, and ask an internal committee headed by vice chairman Donald Kohn to review ways the central bank can boost transparency.┬á The unprecedented expansion of the FedÔÇÖs balance sheet has caused concern that the central bank is encouraging excessive risk taking and distorting pricing in financial markets. ┬á The committee will probably recommend that the central bank reveal credit ratings on collateral it holds in a program supporting American International Group Inc., the people said. The panel will also suggest more disclosure about the mortgages and related securities the central bank took on while orchestrating the merger of Bear Stearns Cos. with JPMorgan Chase & Co. ┬á The U.S. Senate has urged the Fed to release details on loan collateral at least every month, and called on the central bank to provide the number of borrowers and say whether loans accepted in the bailouts of Bear Stearns and AIG have recorded losses that wonÔÇÖt be recovered, as well as details on the companies that received Fed loans. . ┬á Bernanke is quoted saying the biggest risk to an economic recovery is a shortage of ÔÇ£political will.ÔÇØ ┬á ÔÇ£One of the admirable features of Ben Bernanke is that he has laid out the rationale for the various steps the Fed has taken and has done it in an effective way,ÔÇØ Lawrence Summers, director of the White House National Economic Council, said in an April 14 interview with Bloomberg Television.