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Bankers Decide Their Own Regulations

Bankers Decide Their Own Regulations

The way that regional Federal Reserve boards are chosen leads to an inherent conflict of interest, says the Government Accountability Office in a new audit of the Fed. In a brilliant management move, each Fed board picks its members from local businesspeople and bankers. The problem, though, is that the bankers who are on the board help decide what the regulations on the banks that they work for should be.

According to the Washington Post, this means that “executives from Goldman Sachs, J.P. Morgan Chase, General Electric and other firms sat on the boards of regional Federal Reserve banks while their firms benefited from the central bank’s policies during the financial crisis.” In a particularly embarrassing example, the person who handled the bailout of Goldman Sachs had stock in none other than Goldman Sachs. No wonder everyone is so upset at Wall Street.

These systemic conflicts of interest could help explain why the government bailouts were so cushy for big banks, but did little to improve the lives of workers who may have lost their jobs, homes and wealth due to the recession. As we know, bankers sometimes forget that the world doesn’t actually revolve around them, and that what’s best for them may not be what’s best for everyone else. It just looks like there weren’t enough structures in place to make sure they didn’t lose sight of their own private balance sheets.

The GAO report has a lot of recommendations for how to improve the regional Fed boards. They include more clearly delineating what kinds of people can hold what positions and increasing diversity by appointing more women and minorities. Though these are certainly a start, the Fed is not going to regain its credibility or fix the economy until it starts looking out for all Americans, not just those in the top 1%.

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Photo from epicharmus via flickr.

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139 comments

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4:38AM PDT on Oct 25, 2011

You should read the Protocol of Zion. It's fiction... but enlightening.

10:29PM PDT on Oct 24, 2011

It's incredible that even after the banks raped everybody financially that this can still be allowed... It's absolutely beyond me!!! Why is is that this life must constantly be about slavery, about raping the masses and bleeding them for they are worth? That 'they' get away with inpunity and just laugh and laugh all the way to the bank?

The moneytary system is flawed and what's even more amazing is that the system of charging interest on debt is not fair or right... What's even more amazing is that Americans claim to be the 'biggest Christians' on the planet yet their religious convictions clearly do not translate into the real world. You religious structure is for display and show only... Your Bible is clear on the fact that your are not allowed to charge interesty on debt... Unfortuantely this sick money grabbing behaviour is exported and all other supposed democratic systems adopt the same thing...

2:25AM PDT on Oct 24, 2011

Someone should regulate the banks.

9:53PM PDT on Oct 23, 2011

Just when you think you've heard it all .... Talk about the fox guarding the henhouse!

3:26PM PDT on Oct 23, 2011

You never answer the question Marg. How am I delusional or radical right...specifically?

2:33PM PDT on Oct 23, 2011

You are so funny. Have you ever thought of doing stand up?

1:34PM PDT on Oct 23, 2011

Wow, I've been called about everything but not a delusional right wing radical. Thats a first for me.

Marg, you really do struggle with your athieism and should have mental help readily available.

Why would you make yet another attack on me? I seek the wisdom of all religion and celebrate our areas of common belief, not dwell upon where we differ. How does that make me a right wing radical or delusional?



12:53PM PDT on Oct 23, 2011

It is reading forums like this that helps give me more understanding and conviction of prophecy concerning the last days.It gives first hand understanding of the way humans think..of their stubborn refusal to accept warnings either from a human standing or frrom a spiritual standing.Not for no reason has Judge Edith Jones from the USA made such a convicting statement of the state of law there.I am not from the USA but a commonwealth country but her statement would be relevant the world over.Corruption is rife right from poltical level to the ordinary citizen.Mankind has instituted his own problems by following their natural humanistic nature because God has been left out...."What does it profit a man to gain the whole world but lose his own soul? " The truth is elusive for those who value what the earth offers for the short period they exist on it..."It is easier for a camel to pass through the eye of a needle than for a rich man to get to Heaven " The super rich who fuel the monetary system have made their own bed and will have to lie in it.But then even those on the poverty line and below too just follow along like goats simply because they have been blinded by humanism.I mean this topic says "Bankers decide their own regulations ".Now the question should be .."who is really controlling this world? ".It is humanistic values in their true form.

12:41PM PDT on Oct 23, 2011

Kill the fed, not restructure it.

11:32AM PDT on Oct 23, 2011

Bankers are Wankers.....

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