NACBA
03-04-2015, 05:57 AM
(Bloomberg) -- Federal Reserve Chair Janet Yellen, countering criticism from members of Congress, said the central bank is trying to avoid being too cozy with the Wall Street firms it supervises and wants to ensure that regulators aren’t afraid to confront the financial industry.
“The risk of regulatory capture is something the Federal Reserve takes very seriously and works very hard to prevent,” Yellen said in remarks prepared for a speech in New York on Tuesday night. “It is important that anyone serving the Fed feel safe speaking up when they have concerns about bias toward industry, and that those concerns be addressed.”
http://media.gotraffic.net/images/iiktTxZ4.Vxc/v6/1200x-1.jpg
The Fed has been criticized by Democratic lawmakers, including Senator Elizabeth Warren of Massachusetts, who say it’s deferential to large banks. The issue was the subject of a Senate hearing in November following allegations by Carmen Segarra, a former examiner at the Federal Reserve Bank of New York, who said her colleagues had been too soft on Goldman Sachs Group Inc.
At the hearing, Warren told New York Fed President William C. Dudley that he needs to fix a “cultural problem” or “we need to get someone who will.”
The Fed has also come under fire from Republicans, including Richard Shelby of Alabama, the Senate Banking Committee chairman, who called for more Fed transparency and greater congressional oversight at a hearing Tuesday.
Yellen, in her speech to the Citizens Budget Commission, also took aim at ethical lapses at large banks supervised by the Fed.
Follow the Law
“We expect the firms we oversee to follow the law and to operate in an ethical manner,” she said. “Too often in recent years, bankers at large institutions have not done so, sometimes brazenly.”
Such incidents “raise legitimate questions of whether there may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness,” she said.
Global regulators, including the Fed, are trying to tighten oversight of financial benchmarks that are used to price everything from student loans to mortgages, oil and currencies.
The world’s largest banks have paid billions of dollars to settle allegations of rigging Libor and other interest rates. Six firms, including Citigroup Inc. and UBS Group AG, paid $4.3 billion in November to settle probes into the manipulation of foreign-exchange rates.
http://www.bloomberg.com/news/articles/2015-03-04/yellen-says-fed-seeks-to-avert-capture-by-banks-it-oversees
“The risk of regulatory capture is something the Federal Reserve takes very seriously and works very hard to prevent,” Yellen said in remarks prepared for a speech in New York on Tuesday night. “It is important that anyone serving the Fed feel safe speaking up when they have concerns about bias toward industry, and that those concerns be addressed.”
http://media.gotraffic.net/images/iiktTxZ4.Vxc/v6/1200x-1.jpg
The Fed has been criticized by Democratic lawmakers, including Senator Elizabeth Warren of Massachusetts, who say it’s deferential to large banks. The issue was the subject of a Senate hearing in November following allegations by Carmen Segarra, a former examiner at the Federal Reserve Bank of New York, who said her colleagues had been too soft on Goldman Sachs Group Inc.
At the hearing, Warren told New York Fed President William C. Dudley that he needs to fix a “cultural problem” or “we need to get someone who will.”
The Fed has also come under fire from Republicans, including Richard Shelby of Alabama, the Senate Banking Committee chairman, who called for more Fed transparency and greater congressional oversight at a hearing Tuesday.
Yellen, in her speech to the Citizens Budget Commission, also took aim at ethical lapses at large banks supervised by the Fed.
Follow the Law
“We expect the firms we oversee to follow the law and to operate in an ethical manner,” she said. “Too often in recent years, bankers at large institutions have not done so, sometimes brazenly.”
Such incidents “raise legitimate questions of whether there may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness,” she said.
Global regulators, including the Fed, are trying to tighten oversight of financial benchmarks that are used to price everything from student loans to mortgages, oil and currencies.
The world’s largest banks have paid billions of dollars to settle allegations of rigging Libor and other interest rates. Six firms, including Citigroup Inc. and UBS Group AG, paid $4.3 billion in November to settle probes into the manipulation of foreign-exchange rates.
http://www.bloomberg.com/news/articles/2015-03-04/yellen-says-fed-seeks-to-avert-capture-by-banks-it-oversees