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September 29, 2014

Senators Call for Probe of New York Fed After Leaked Recordings Suggest Bank Leniency 
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Two Democratic senators are calling for hearings to probe new
allegations the New York Federal Reserve Bank has grown too close to the
institutions it is supposed to oversee. A report from Pro Publica and
This American Life discloses secret audiotapes made by Carmen Segarra, a
former Fed employee now suing for wrongful termination. Segarra says she
was fired for challenging her colleagues' deferential treatment of the
banks they are tasked with regulating. In one recording, a colleague
says he worries the Fed is being too hard on Goldman Sachs.

Unidentified: "I think we don't want to discourage Goldman from
disclosing these types of things in the future. Therefore, maybe some
comment that says, 'Don't mistake our inquisitiveness, and our desire to
understand more about the marketplace in general, as a criticism of you
as a firm necessarily.' Like, I don't want to hit them on the bat with a
head, and then they're going to say, 'Screw it, we're not going to
disclose it again. We don't need to.'"

In response to the recordings, Senators Elizabeth Warren and Sherrod
Brown are calling for Senate hearings when Congress returns in November.

 

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