Weekend Economists Salute the 99% September 26-28, 2014

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24. Warren Calls for Hearings on New York Fed Allegations

http://www.bloomberg.com/news/2014-09-26/new-york-fed-denies-allegations-of-bank-supervision-lapse.html

U.S. Senator Elizabeth Warren called for congressional hearings into allegations that the Federal Reserve Bank of New York has been too deferential to the firms it regulates.

A radio program about the regional Fed bank raised “disturbing issues” and “it’s our job to make sure our financial regulators are doing their jobs,” Warren, a Massachusetts Democrat and member of the Senate Banking Committee, said in a statement yesterday.

The program “This American Life” released the transcript of a broadcast that includes excerpts of conversations it said were secretly recorded by Carmen Segarra, a former New York Fed bank examiner who was fired in 2012, with some of her colleagues and her supervisor.

In the transcript, Segarra described how she felt that her Fed colleagues were afraid of Goldman Sachs Group Inc. and handled it with kid gloves.

“What I was sort of seeing and experiencing was this level of deference to the banks, this level of fear,” she said.

The New York Fed said it “categorically rejects” Segarra’s allegations.