Andy Peters — Morning Scan: Fed Wonders if It's 'Captured'; Commodity Holdings Questioned

The Fed established a team in Washington to review whether it's too cozy with the banks it regulates. The New York Timesdescribed the review as a "surprise announcement." The Fed's inspector general will simultaneously conduct a similar review, looking specifically at whether "top officials were hearing all the opinions of Fed bank examiners." The moves were announced Thursday, ahead of Fed Governor Daniel Tarullo's and New York Fed President William Dudley's testimony on Friday before a Senate committee. Dudley is expected to be questioned aggressively about whether the Fed is guilty of "regulatory capture." Among the areas to be studied in the Fed's internal review is whether board members are supplied with adequate information to make sound oversight decisions. Lawmakers will have plenty of ammunition to level charges that the Fed has been captured, from the secret recordings of Fed conversations about Goldman Sachs, to the recent revelation that a Goldman employee received confidential information from a Fed worker about a bank the Fed regulates.

American Banker
Morning Scan: Fed Wonders if It's 'Captured'; Commodity Holdings Questioned
Andy Peters