Inquirer Editorial: Open the books

The public scored an important victory Monday when the Supreme Court allowed reporters to obtain details of the Federal Reserve's bank bailout.

The justices let stand a lower-court ruling that ordered the Fed to release records of its $2 trillion loan program. The Bloomberg News organization filed suit under the Freedom of Information Act in November 2008, seeking details of the emergency loans.

The central bank now says it will release the information, probably within the next two weeks.

The Federal Reserve had refused to identify the firms it lent to, how much it lent, or what assets were used as collateral. The action came in the wake of the Lehman Brothers collapse in 2008, which led to the greatest financial crisis since the Great Depression.

The Fed argued that disclosing the names of the banks would cause a run on them or a sell-off by investors.

But taxpayers have a right to know what happened with their money. They had no choice as they became investors in undisclosed financial institutions, at a level of lending that was unprecedented.

And investors also have a right to know the financial health of the banks in which they place their money. Perhaps fewer financial institutions would have taken part in the kind of risky investment schemes that led to the crash if they'd known it would expose them to greater public scrutiny.

The impact of the financial collapse continues to this day. The Federal Reserve shouldn't be allowed to operate in secrecy while it commits vast sums of the public's money to fix the damage.

The Fed does play an important role in stabilizing markets during such a crisis. There's an argument to be made for allowing the central bank to release its emergency loan information on a periodic basis, to prevent the very panic it's trying to ward off.

But the public and investors shouldn't be left in the dark. It's their money.