6:27 p.m. | Updated with elaboration on Bloomberg News response.
The Federal Reserve unleashed an unusual attack Tuesday on Bloomberg News, charging in a letter to members of Congress that stories about its bailout programs “have contained a variety of egregious errors and mistakes.”
The letter, signed by the Fed chairman, Ben S. Bernanke, showed that the central bank remains deeply concerned that public anger about its actions during the financial crisis will have political consequences, like new limits on its freedom of action.
The letter did not name Bloomberg, but the details make clear that the Fed is responding to an article by Bloomberg Markets magazine that was published last week. The article reported that cheap loans from the Fed allowed banks to pocket about $13 billion in profits during a two-year period ending in March 2009.
The article also reported that the central bank provided $7.8 trillion in total aid during that period, more than half to the nation’s six largest banks.
The Fed said that it disputed both calculations. The letter notes that the volume of loans outstanding at any one time never exceeded $1.5 trillion. And it says that those loans generally carried interest rates above the market rate, meaning that banks did not generate additional profits by leaning on the Fed.
A Bloomberg News spokesman, Ty Trippet, said: “We have met with the Fed numerous times on this issue and not once has the Fed ever told us our reporting on this issue is inaccurate. We stand by our reporting.” The organization also issued a point-by-point rebuttal.
The Fed letter also airs a number of other complaints, none of which obviously amount to an “egregious error” or a mistake. For example, it says that journalists should not describe Fed programs as secret because the central bank publicized the amounts that it lent, even though it refused to identify the recipients.
Article source: http://feeds.nytimes.com/click.phdo?i=3a404cb59b8f96f584c1c2c47553e265
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