Txdigest.com

How a bank regulator discovered that the New York FED was controlled by the too big to fail banks it was supposed to regulate, namely Goldman Sachs, and was fired.

...A year later, Congress gave the Federal Reserve even more oversight authority. And the New York Fed started hiring specialized examiners to station inside the too-big-to fail institutions, those that posed the most risk to the financial system.

One of the expert examiners it chose was Carmen Segarra.

Segarra appeared to be exactly what Beim ordered. Passionate and direct, schooled in the Ivy League and at the Sorbonne, she was a lawyer with more than 13 years of experience in compliance – the specialty of helping banks satisfy rules and regulations. The New York Fed placed her inside one of the biggest and, at the time, most controversial banks in the country, Goldman Sachs.

It did not go well. She was fired after only seven months.

As ProPublica reported last year, Segarra sued the New York Fed and her bosses, claiming she was retaliated against for refusing to back down from a negative finding about Goldman Sachs. A judge threw out the case this year without ruling on the merits, saying the facts didn't fit the statute under which she sued.

At the bottom of a document filed in the case, however, her lawyer disclosed a stunning fact: Segarra had made a series of audio recordings while at the New York Fed. Worried about what she was witnessing, Segarra wanted a record in case events were disputed. So she had purchased a tiny recorder at the Spy Store and began capturing what took place at Goldman and with her bosses.

http://www.propublica.org/article/carmen-segarras-secret-recordings-from-inside-new-york-fed

Of course..maybe she just sucked at her job.

"The decision to terminate Ms. Segarra's employment with the New York Fed was based entirely on performance grounds, not because she raised concerns as a member of any examination team about any institution," it said in a two-page statement responding to an extensive list of questions from ProPublica and This American Life.

The statement also defends the bank's record as regulator, saying it has taken steps to incorporate Beim's recommendations and "provides multiple venues and layers of recourse to help ensure that its employees freely express their views and concerns."

"The New York Fed," the statement says, "categorically rejects the allegations being made about the integrity of its supervision of financial institutions."

Of course..maybe she just sucked at her job.

She sucked at it because she wouldn't play the game. That's why she was fired.

If you would rather listen to this story, it was just broadcast yesterday on "This American Life" from NPR.
Here is the link.

http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra

I just finished listening to this broadcast on NPR. It was stunning to hear what real life is like in the bowels of a buracracy like the FED. How they try to manipulate and bend you and when they can't, they just fire you. It this doesn't prove that the FED needs to be audited I don't know what does.

But, a better title would have been "How the FED manipulates it's own regulators to favor the big banks".

How about how GoldmanSachs runs the Executive branch ?

Red Oak wrote:How about how GoldmanSachs runs the Executive branch ?

The 24 dollar question is "who gives Obama his marching orders?"

Here's Stockman's take. Just the jist, it's long and wonky.

Actually, what the tapes really show is that the Fed’s latest policy contraption—-macro-prudential regulation through a financial stability committee—-is just a useless exercise in CYA. Apparently, even the colony of the bubble blind which inhabits the Eccles Building has started to get nervous about financial bubbles and instability in recent months....

Not 10,000 Carmen Segarra’s could stop the boom and bust cycle thus manufactured by the money printers ensconced in the Eccles Building. Stanley Fischer’s financial stability committee, therefore, is not merely a pointless farce. Its evidence that the next financial crash is nigh.

http://davidstockmanscontracorner.com/the-goldman-tapes-and-why-the-delusion-of-macro-prudential-regulation-means-the-next-crash-is-nigh/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+PM+Monday