The Secret Goldman Sachs Tapes. Probably most people would agree that the people paid by the U.S. government to regulate Wall Street have had their difficulties. Most people would probably also agree on two reasons those difficulties seem only to be growing: an ever-more complex financial system that regulators must have explained to them by the financiers who create it, and the ever-more common practice among regulators of leaving their government jobs for much higher paying jobs at the very banks they were once meant to regulate. Wall Street's regulators are people who are paid by Wall Street to accept Wall Street's explanations of itself, and who have little ability to defend themselves from those explanations. Our financial regulatory system is obviously dysfunctional.
But because the subject is so tedious, and the details so complicated, the public doesn't pay it much attention. First, a bit of background -- which you might get equally well from today's broadcast. It's an extraordinary document. 1. 2. The Secret Goldman Sachs Tapes. The Secret Recordings of Carmen Segarra. We hear what the New York Fed and Goldman Sachs say about all this. We hear a New York Fed supervisor tell Carmen Segarra how an examiner should talk and act to be successful at the Fed. And we hear what happens to Carmen when she does exactly what David Beim's confidential report told the Fed it needed to encourage its examiners to do in order to spot the next financial crisis. In the course of reporting our story with ProPublica, we sent lots of questions to the New York Fed and Goldman Sachs.
We wanted to share those with you, along with the institutions' responses. Our questions to the New York Fed are here. The New York Fed responded with a statement and later this email. Our questions to Goldman Sachs are here. Goldman Sachs' response is here. Here is a transcript of the full episode.Business. NY Fed Fired Examiner Who Took on Goldman.
Carmen Segarra outside the Federal Reserve Bank of New York, on Oct. 10, 2013. In a wrongful termination lawsuit, Segarra says she was fired by the Fed after she refused to change a finding Goldman Sachs had inadequate controls over conflicts of interest. (Nabil Rahman for ProPublica) Under a Fed mandate, the investment banking behemoth was expected to have a company-wide policy to address conflicts of interest in how its phalanxes of dealmakers handled clients. Although Goldman had a patchwork of policies, the examiner concluded that they fell short of the Fed’s requirements. That finding by the examiner, Carmen Segarra, potentially had serious implications for Goldman, which was already under fire for advising clients on both sides of several multibillion-dollar deals and allegedly putting the bank’s own interests above those of its customers.
It could have led to closer scrutiny of Goldman by regulators or changes to its business practices. ‘Eyes Like Saucers’ Feds Feeble Swipe Fee Rule Is an Unauthorized Sop to Big Banks - Bank Think. The Federal Reserve Board just gave the biggest banks in the United States a $4 billion annual present and flagrantly disregarded the law to do so. As part of the Dodd-Frank Act, Congress passed a provision called the Durbin amendment that regulates the fees that banks charge on every debit card transaction. These fees—swipe fees—are higher in the U.S. than anywhere else in the developed world because of the banks’ anticompetitive practices and are a $17 billion/year boondoggle for U.S. banks, with the money ultimately coming out of American consumers’ pockets in the form of higher retail prices.
Congress directed that swipe fees be set as “reasonable and proportional” to the incremental cost of authorizing and clearing a debit card transaction. The Fed responded with a pair of alternative proposed rules. So what changed? As the result of this lobbying the Fed decided to include in its calculation costs other than those that Congress specifically directed to be included. Adam J. Federal Reserve System. Map of the twelve Federal Reserve Districts, with the twelves Federal Reserve Districts enumerated in black circles and the twelve Federal Reserve Banks marked as black squares. Branches within each district are marked as red circles.
The Washington, D.C. headquarters is marked with a star enclosed in a black circle. A Federal Reserve Bank is a regional bank of the Federal Reserve System, the central banking system of the United States. There are twelve in total, one for each of the twelve Federal Reserve Districts that were created by the Federal Reserve Act of 1913.[1] The banks are jointly responsible for implementing the monetary policy set forth by the Federal Open Market Committee, and are divided as follows: Some banks also possess branches, with the whole system being headquartered at the Eccles Building in Washington, D.C.
History[edit] Alexander Hamilton, the first Secretary of Treasury, started a movement in 1780 advocating for the creation of a central bank. The U.S. Banks[edit] Debunking the Federal Reserve Conspiracy Theories. By: Edward Flaherty, Ph.D. Department of Economics College of Charleston, S.C. Facts: Yes, the Federal Reserve banks are privately owned, but they are controlled by the publically-appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board.
In addition, nearly all the interest the Federal Reserve collects on government bonds is rebated to the Treasury each year, so the government does not pay any net interest to the Fed. Facts: No foreigners own any part of the Fed. Each Federal Reserve bank is owned exclusively by the participating commercial banks and S&Ls operating within the Federal Reserve bank's district. Fact: Independent accounting firms conduct full financial audits of the Federal Reserve banks and the Board of Governors every year. Facts: The Federal Reserve rebates its net earnings to the Treasury every year. Facts: The Federal Reserve banks have only a small share of the total national debt (about 7%).