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The investigative story alleging weak supervision by the Federal Reserve Bank of New York has sent shockwaves through the regulatory community, but whether it will lead to any change of course in policy is still an open question.
September 30
WASHINGTON Sens. Tim Johnson, D-S.D., chairman of the Banking Committee, and Sherrod Brown, D-Ohio, announced the panel will hold a hearing next month over concerns about regulatory "capture" at the bank regulatory agencies.
The hearing, which will occur Nov. 21, was scheduled following a September investigative report that raised questions about the Federal Reserve Bank of New York's supervision of major banks, including Goldman Sachs.
The investigation by ProPublica and the radio show "This American Life" alleged the regulator was too deferential in its treatment of Goldman. It was based on internal conversations at the New York Fed that were secretly taped by a former examiner, Carmen Segarra, who later sued the agency over her firing. The New York Fed strongly disputed how it was portrayed in the story.
"American taxpayers deserve regulators who will fight each day on their behalf, rather than cozy up to the very industry that they are meant to police," Brown said in a press release. "The allegations brought forth by the release of the recordings regarding the Federal Reserve Bank of New York and Goldman Sachs deserve a full and thorough examination."
The hearing will be held by the subcommittee on financial institutions and consumer protection, which is chaired by Brown.
