Former Goldman Sachs Chief Economist and current President of the New York Federal Reserve, William Dudley, is preparing to once again speak on Wall Street’s corrupt culture. He’s not going to do anything about it, but he does love to talk (and talk and talk) about how Wall Street’s culture of corruption is creating instability and distrust in the financial markets.
Dudley’s latest critique of Wall Street’s culture will come today before a Senate Banking subcommittee, right on the heels of revelations that a former New York Fed official who went to work for Goldman Sachs gained access to confidential information with help from someone at the New York Fed. Goldman Sachs announced yesterday they had fired the employee involved in the scandal. No action as been announced by the New York Fed so far.
But Goldman Sachs gaining access to confidential NY Fed information is just the beginning of Dudley’s problems. A whistleblower named Carmen Segarra recently revealed that she recorded conversations where New York Fed officials helped Goldman Sachs executives avoid regulations and cover up crimes. Segarra was terminated by the New York Fed for asking too many questions despite that being her job as an examiner.
And if that was not enough, a recent report on Goldman Sachs’ manipulation of the commodity markets partly points the finger at the New York Fed for failing to regulate Goldman.
A raft of settlements and criminal charges against big Wall Street firms reinforces a loss of public faith in the banking system that poses a threat to the country’s financial stability, said William Dudley, president of the Federal Reserve Bank of New York. “This loss of trust is so severe that it has become a financial stability concern,” Mr. Dudley said in remarks prepared for delivery in testimony before a subcommittee of the Senate Banking Committee on Friday.
Mr. Dudley’s remarks are aimed at defending the central bank’s role as a bank regulator after widespread accusations that supervisors had been too soft on or close to the investment giants they are charged with overseeing. “If bad behavior persists, it would not be unreasonable–and may even be inevitable–for one to conclude that large firms are too big and complex to manage effectively,” said Mr. Dudley, a former partner at Goldman Sachs Co.
Speech time is over Bill. Either take the hammer to these folks or resign in shame. I’m sure Goldman can – once again – find a place for you.
The New York Federal Reserve bank has been exposed as captured by Wall Street. While some will undoubtedly snark same as it ever was, there is little doubt that the criminal behavior being engaged in will eventually lead to another crash. Nothing kills financial markets like fraud and the confusion and panic it sows when the bubble pops and there’s no one left to lie to.
Will the American people accept TARP 2, will anyone? What happens when the serfs revolt against their criminal masters on Wall Street and Wall Street’s puppets in Washington?