Bill Black, Carmen Segarra, and the Regulatory Failure That Is the Federal Reserve Bank of New York

By: Saturday October 12, 2013 12:40 pm

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.


FDL Book Salon Welcomes Sheila Bair, Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself

By: Sunday November 18, 2012 1:59 pm

Bull by the Horns is the story of financial calamity seen from the perspective of this public servant, rendered from detailed notes. We learn with whom she met, what was said, what decisions taken, and how things turned out. She begins with the battles over deregulation of the banks (Basel II), with the gathering sub-prime storm, and proceeds through the disaster: WaMu, Wachovia, Citigroup, Bank of America, AIG, Citigroup again. And then the battles of the aftermath, over among other things Dodd-Frank, Basel III and the robosigning frauds. This is a book for aficionados of infuriating detail.

FDL Book Salon Welcomes Jeff Connaughton, The Payoff: Why Wall Street Always Wins

By: Sunday October 21, 2012 1:59 pm

Jeff Connaughton has authored a powerful, and chilling insider’s perspective on the financial crisis and the pathetic governmental response to it. The second part of his title sums up the result and the first half explains why Wall Street always wins. Many, perhaps most Americans are likely to agree with both parts of Connaughton’s title so this book will not transform the public’s view of the issues. The public largely has this set of issues correct. Connaughton gives the readers unique access to the facts because he had a front row seat to many of the key discussions and he has the analytical abilities and expertise to explain the significance of those facts.

Sheila Bair: HAMP Sucked

By: Wednesday September 26, 2012 7:30 am

I have not read Sheila Bair’s upcoming book, “Bull by the Horns,” but it’s on a growing list (I hear former Senate staffer Jeff Connaughton’s book is excellent as well). Arthur Delaney notes that she had harsh words for HAMP, the Administration’s failed program to rescue homeowners facing foreclosure. And she didn’t shy away from accurately describing the program as one that fostered predatory lending.

Sheila Bair: HAMP Sucked

By: Tuesday September 25, 2012 6:00 pm

There was never any desire to protect homeowners or save their homes, which Sheila Bair says flat out: “HAMP was a program designed to look good in a press release, not to fix the housing market… I don’t think helping home owners was ever a priority for them,” she says, referring to Tim Geithner and Larry Summers.

Dayen’s Roundup from April 15 … File Your Taxes! 2012

By: Monday April 16, 2012 6:15 am

Dayen’s news roundup from April 15, 2012, when instead of doing his taxes, he was reading stories about Iran’s nuclear program, World Bank, UN advisers, Summit of the America’s, Secret Service, Sheila Bair, Elliot Spitzer, Judge Lippman, JP Morgan, North Korea, SOPA, NLRB, Sarkozy, and more.

Sheila Bair’s Fabulous Idea: $10 Million Loans for Everyone!

By: Sunday April 15, 2012 12:55 pm

Yes, former Chair Bair is speaking very satirically — her proposal is actually a Swiftian attack on the ways that the Wall Streeters were and are allowed to profit from our misery — but really, is it any worse than what has actually been done in the name of shoring up capitalism?

NYT Picks Up on Weaknesses of Foreclosure Fraud Settlement

By: Wednesday March 28, 2012 7:30 am

On March 13, I read the foreclosure fraud settlement documents and noticed that the banks would be eligible to get credit for their penalty for performing routine actions, like waiving deficiency judgments, bulldozing or donating homes. Two full weeks later, the New York Times got around to reading the documents and noticing the same thing.

Bair Recommends Scrapping the Volcker Rule

By: Saturday December 10, 2011 5:00 pm

If you needed to appeal to one authority on banking regulation, you could do worse than to consult Sheila Bair, the former chairwoman of the FDIC. And now she’s advocating scrapping the Volcker rule and starting over. She comes at this by looking at the spectacle of MF Global – a brokerage house that would not be covered under the Volcker rule – and asking whether they would be permitted to trade depositor funds on their own account if they were a bank. The answer is far less clear-cut than it should be – and that’s the problem with how the Volcker rule emerged from the sausage grinder of the regulatory apparatus.

Bair, Bernanke Ready to Move on Swipe Fee Rule, Despite Objections

By: Sunday May 15, 2011 8:35 am

A couple weeks ago, we saw the enormous lobby culture massing around swipe fees, the relatively obscure issue that determines where billions of dollars go between banks and retailers. The important thing to start with is that this was already determined through a public process. Last year, Congress held a vote, Dick Durbin got over 60 of his colleagues to support him, the measure survived reconciliation, passed into law, and the Federal Reserve began to implement the rule. The system, therefore, worked. What banks are doing is trying to roll back the clock on the reform. They were paying attention to other matters in FinReg and now they have circled back to this. Because they have money and influence, they think they can just nullify a year’s worth of policymaking.

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