Elizabeth Warren sent me the following email:
The Federal Reserve Bank of New York is supposed to be responsible for regulating the nation’s biggest banks.
But 46 hours of secret audio recordings released by a former New York Fed regulator – a woman who says she was fired for being too tough on Goldman Sachs – indicate that the big banks are the ones in charge, not the Fed.
When regulators care more about protecting big banks from accountability than protecting the American people from risky behavior on Wall Street, it threatens our whole economy.
Our regulators seem to think they’re being tough on the big banks. But when I ask them about the last time they took a big bank to trial, or the last time they referred a senior bank executive for criminal prosecution, they’re stumped.
They claim that closed-door settlement agreements – agreements that don’t hold any individuals accountable – are enough to teach the big banks a lesson.
Call me skeptical, but when Wall Street CEOs like Jamie Dimon are getting massive pay raises for negotiating sweetheart deals with the regulators, it doesn’t seem like the American people are getting a good deal. That’s why I introduced a bipartisan bill earlier this year to require detailed, public disclosures of all settlements so we can see what’s hidden in these secret agreements.
But the tapes from this whistleblower show that the problem isn’t simply that the big banks get sweetheart deals. It shows that the relationship between the regulators and the financial institutions they oversee is far too cozy to provide the tough oversight that’s really needed – and calls into question whether the Federal Reserve is up to the task of protecting us at all.
This is simple: Bankers on Wall Street need to follow the law – and when they don’t, they should be held accountable. For that to work, regulators in Washington and New York need to enforce the law – and when they don’t, they should be held accountable.
We can keep making the rules on Wall Street tougher and tougher, but it won’t make an ounce of difference if the regulators won’t enforce the rules that are there. We need to get to the bottom of this.
Thank you for being a part of this,
I love the bulldog nature of Elizabeth Warren. Once she gets her teeth into an issue, she does not let go. Imagine if the Republicans take over the Senate, and she loses her power to hold hearings.