Back in 2009, law professor and former banking regulator Bill Black excoriated the internal corporate culture of the Federal Reserve when it comes to banking regulatory oversight. For a very specific illustration of what Black was talking about, just take a look at the complaint filed by former banking regulator Carmen Segarra against her former employer, the Federal Reserve Bank of New York. She was hired and assigned to investigate problems at Goldman Sachs, and when she and her team discovered some major problems, she was pressured to downplay them and back off. When she refused, she was terminated and Goldman Sachs was given a clean bill of health by the folks that fired her.
You’re shocked, I know. But the details, along with the documentation, are the truly shocking part of all this. Not about Goldman Sachs, but about their pals at the Federal Reserve Bank of New York.