Recent audio of the Federal Reserve Goldman Sachs combine should surprise no one.
What do you call a meeting between regulators from the Federal Reserve and Goldman Sachs, JPMorgan, or any other big Wall Street bank?
A job interview.
Thus, we read in the New York Post: “Tapes showing meek oversight of Goldman are about to rock Wall Street.”
Wall Street is about to be rocked by secretly recorded audio tapes that purport to show a too-cozy relationship between the New York Federal Reserve Bank and the financial institutions it is supposed to regulate.
The 45 hours of tapes, made by Carmen Segarra, a former NY Fed worker, capture former co-workers, whose job was to keep banks like Goldman Sachs in line, instead deferring to the banks, being unwilling to take action and being extremely passive, according to NPR’s “This American Life,” and ProPublica which obtained the tapes and is scheduled to air a program about the matter Friday night.
Segarra, ironically, was hired by the NY Fed in October 2011 to help toughen up their oversight. She was fired in 2013 after, she claims in a lawsuit, she tried to get Goldman to toe the line on regulations.
The NY Fed has regulators embedded at each of the large banks it oversees. On her first day on the job, Segarra was assigned to Goldman.
The pushback from Goldman started right away. At one of her first meetings, a senior compliance officer at Goldman said certain consumer laws didn’t apply to the bank’s wealthier clients.
“I was shocked,” Segarra tells a reporter for the NPR show, adding that her notes on the meeting had that exact line.
Goldman, through a more seasoned Fed regulator also embedded at the Wall Street bank, told Segarra her notes were wrong.
Segarra said they weren’t.
Her more senior colleague asked her to change the notes.
Segarra is obviously the exception that proves the rule. Why in the world would anyone “get tough” with a future employer, from whom they will one day earn millions? Wall Street’s payroll is brimming with former government regulators (In the same way it’s full of former elected representatives, like Eric Cantor).
No system works when the people involved are evil to the core. America doesn’t need more laws, it needs a spiritual awakening. Anything else is just putting a Band-Aid on a cancer patient.