ELIZABETH WARREN: The Secret New York Fed Tapes Confirm The Game Is Rigged
Myles Udland
BusinessInsider.com
Oct. 1, 2014
Sen. Elizabeth Warren (D-Mass.), who has called for congressional hearings regarding conduct at the Federal Reserve following the ProPublica and This American Life report from last week, told NPR in an interview on Wednesday that the report, “tells us exactly what we already knew.”
Warren told NPR’s Steve Inskeep that the report, “ultimately this report tells us exactly what we already knew — that the relationship between regulators and the financial institutions they oversee is too cozy to provide the kind of tough oversight that’s really needed.”
Last week, a report from ProPublic and This American Life released secret audio recordings from former New York Fed official Carmen Segarra that appeared to showed disagreements and dysfunction among Fed officials stationed inside Goldman Sachs.
Listening to the tapes, Warren said two things jumped out: the lack of truthful reporting and the emphasis by Fed officials on talk over action.
“You know, the regulators seemed to think that it was a victory just to raise an issue, even if they took absolutely no action to address the issue,” Warren said. “And that’s the kind of approach that allowed banks to take on massive risks before the financial crisis. You know, think about that: The regulators seemed to think that fussing at banks behind closed doors was their toughest sanction. Does anyone believe that Goldman Sachs is gonna give up a deal that would yield millions of dollars because someone fussed at them behind closed doors?”
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