Tuesday, October 14, 2014

The Fed's "Doomsday Book"

Over at the Wall Street Journal’s blog, Damian Paletta reports the existence of  “a compendium of legal opinions, in some cases stretching back decades, that explore the legal limits of the Federal Reserve in the event of a financial crisis."  In what I take to be a pun on the great medieval document, the Fed lawyers refer to the "big, fat binder” as “the Doomsday Book.”  During a trial growing out of the federal government's bailout of AIG, David Boies read from its first page a description of the binder as "a collection of emergency documentation and memoranda compiled by the Legal Department of the Federal Reserve Bank of New York.”

Of special note is a legal memorandum written by Howard H. Hackley, formerly general counsel of the Fed's Board of Governors.  A subsequently written document in the binder calls the Hackley memo “probably the most important historical document in the collection: a piece of original legal scholarship” that includes "an extensive legal history of Federal Reserve lending activities.”

Update: More, from the New York Times.

1 comment:

PCB said...

Great post, Dan. The Fed keeps a tight grip on Hackley's papers. I went through two failed FOIA requests (the initial one and an appeal) in an attempt to secure his magnum opus, "The Status of the Federal Reserve System in the Federal Government." Fortunately, the inimitable librarians at the Stanford Law Library found a retired economist who had retained a copy and agreed to send it from his farm in Vermont in exchange for postage. It is one of the finest treatments of the legal and historical questions surrounding the Fed and its independence. It's unfortunate that the Fed doesn't make all of Hackley's papers available for scholarly use.