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Congressional watchdog to probe lax Fed bank oversight
Key Excerpts from Article on Website of CNBC/Reuters
Posted: March 14th, 2016
http://www.cnbc.com/2016/03/04/reuters-america-exclusive-con...
A U.S. watchdog agency is preparing to investigate whether the Federal Reserve and other regulators are too soft on the banks they are meant to police. Ranking representatives Maxine Waters of the House Financial Services Committee and Al Green of the Subcommittee on Oversight and Investigations asked the Government Accountability Office on Oct. 8 to launch the "evaluation of regulatory capture" and to focus on the New York Fed. The GAO said it has begun planning its approach. The probe, which had not been previously reported or made public, is the first by an outside agency into the perception that government regulators are "captured" by and too deferential toward the bankers they supervise, so that Wall Street benefits at the public's expense. Such perceptions have dogged the U.S. central bank since it failed to head off the 2007-2009 financial crisis. While the GAO has not yet determined the full scope of the investigation, the other main agencies that embed supervisors inside financial institutions are the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. In their letter, Waters and Green said they are particularly concerned about the New York Fed and reports of a "revolving door" between it and banks and "a reluctance to challenge" the firms.
Note: Are Goldman Sachs' suspicious ties to the New York Fed and the revolving door between Congress and Wall Street finally beginning to get serious attention? For more along these lines, see concise summaries of deeply revealing news articles about corruption in government and in the financial industry.
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