US court skeptical of Fed push for bailout secrecy

* Press seeks details of Fed bailout programs
* Fed says disclosure could hurt banks, financial system
* Bloomberg says disclosure breeds confidence
* News Corp's Fox News also opposes Fed

A federal appeals court on Monday appeared skeptical of U.S. Federal Reserve efforts to prevent the press and the public from learning the names of participants in emergency lending programs designed to support and bail out the financial system.

The central bank has argued that disclosure would cause "competitive and reputational harm" to participants, perhaps triggering bank runs, and impede its ability "to effectively manage the current, and any future, financial crisis."

Bloomberg News and News Corp's (NWSA.O) Fox News Network LLC had sought details of the Fed's actions under the federal Freedom of Information Act, or FOIA, which requires government agencies to make documents available to the public.

A release of data could give the public, including bank shareholders, a better sense of how the Fed was moving to prop up the financial system during what is widely considered the worst financial crisis since the Great Depression.

In a 1-3/4 hour oral argument, a panel of the U.S. Second Circuit Court of Appeals in Manhattan questioned the Fed argument that if potential participants knew they might be named, they might choose not to borrow rather than face a possible "stigma" for seeming to be in trouble.

This, the Fed had argued, "could harm the broader financial system."

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