Sen. Elizabeth Warren (D-Mass.) is demanding Congress examine a “disturbing” report that top financial regulators were too deferential towards Goldman Sachs.
The outspoken bank critic said Friday that a report that recounted secret recordings a former official at the Federal Reserve Bank of New York made of meetings while regulating Goldman Sachs suggests regulators are not doing their job. She said that when Congress returns for a lame-duck session after the election, they must hold hearings examining the matter.
{mosads}“When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy,” she said in a statement. “Congress must hold oversight hearings on the disturbing issues raised by today’s whistleblower report when it returns in November — because it’s our job to make sure our financial regulators are doing their jobs.”
The report from This American Life and ProPublica recounted the experience of Carmen Segarra, a former bank examiner for the New York Fed. Segarra claims that in her efforts to monitor Goldman Sachs, she was repeatedly stymied by fellow regulators, who preferred not to rock the boat, and ended up fired after just seven months.
As her frustrations with the regulator mounted, Segarra actually took to wearing a small microphone to secretly record meetings with fellow staff.
The recordings recount Segarra butting heads with superiors, as she argued that Goldman Sachs lacked a proper conflict of interest policy. Her manager said she had “sharper elbows” and should consider taking a gentler approach to her work.
The story goes on to detail concerns that the New York Fed, a top regulator of some of the biggest names on Wall Street, is too submissive towards the banks it is supposed to regulate.
For her part, Warren has consistently pushed regulators to take a stricter stance with the financial entities they regulate. In particular, she has been frustrated that regulators, along with the Justice Department, have failed to bring charges against bank executives that played a role in the financial crisis, even as the government has struck multibillion-dollar settlements with many of those institutions.
In a response to the report, the New York Fed said it “categorically rejects” allegations of lax oversight.