April 1 (Bloomberg) -- After months of litigation and political scrutiny, the Federal Reserve yesterday ended a policy of secrecy over its Bear Stearns Cos. bailout.
In a 4:30 p.m. announcement in a week of congressional recess and religious holidays, the central bank released details of securities bought to aid Bear Stearns's takeover by JPMorgan Chase & Co. Bloomberg News sued the Fed for that information. Read the whole story: bloomberg.com
NY Fed website:
The Federal Reserve recognizes the importance of transparency to its financial stability efforts and will continue to review disclosure practices with the goal of making additional information publicly available when possible. The release of this information today comes after reaching agreement on issues of confidentiality with JPMorgan Chase with respect to the assets of ML and the American International Group, Inc. (AIG) with respect to ML II and ML III.
As part of extending support to specific institutions, under section 13 (3) of the Federal Reserve Act, the Board of Governors of the Federal Reserve System in 2008 authorized the New York Fed to facilitate lending to three limited liability companies—ML, ML II and ML III. ML was formed to facilitate the merger of The Bear Stearns Companies, Inc. and JPMorgan Chase. The New York Fed extended credit to ML to acquire certain assets of Bear Stearns.
ML II and ML III were formed to facilitate the restructuring of the government’s financial support to AIG. The New York Fed extended credit to ML II to purchase residential mortgage-backed securities from the securities lending portfolio of several regulated U.S. insurance subsidiaries of AIG. The New York Fed extended credit to ML III to purchase multi-sector collateralized debt obligations from certain counterparties of AIG Financial Products Corp.
Holdings of Maiden Lane LLC as of January 29, 2010
Holdings of Maiden Lane II LLC as of January 29, 2010
Holdings of Maiden Lane III LLC as of January 29, 2010
On a side note:
-- 7 charged with insider trading at British banks: Seven people were charged in connection with an insider-trading ring that prosecutors said made about $3.8 million from information garnered at the London printers of UBS and J.P. Morgan Chase's Cazenove unit, Britain's Financial Services Authority said after a 21-month probe.
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