… Historically, the New York Fed has been among the most profitable shareholder-owned corporations in the world. Yet it keeps the details of its shareholders’ ownership information private. What we do know is that its owners include precisely those institutions it is tasked to regulate and supervise and those [it] has obviously failed to adequately supervise. – Josh Rosner1
Or to ask the obvious question with reverse sense; Does Wall Street Own, As In Literally Own, Its Own Regulator?
Rosner's article is long, detailed and well worth reading, but I think the question he brings up in the above needs to be clarified, like, yesterday.
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[1]: "Has the New York Fed been serving the public trust? Has Geithner?", by Joshua Rosner, Naked Capitalism, February 3, 2010.
John-
I was watching a show on CNBC last night about Samuel Israel's big scandal with Bayou Hedge fund. They were interviewing an investor who said he didn't think they set out to commit fraud, but when the losses were more than they wanted to report, they had the CFO Dan Marino set up an "independent" accounting firm to do the books. They pulled a few gimmicks to hide the losses thinking they would cease once they became profitable. It didn't happen, so they kept on their downward path.
If the Fed isn't obligated to tell us when things are going poorly, it is unlikely they would do so. Why else are they so opposed to transparency?
twist -
Is it possible that it's actually legal to have a capital position in the institution that's your own regulator? And whose idea was it to make a huge opaque private bank a bank regulator in the first place? Recuse-Me Timmy, but isn't this ouroboros-class tail recursion?
John-
I wonder if any of our readers with a legal background can answer that? It might be legal, but ethically there has to be something wrong with having Fox Accounting being the auditor for its parent company, Chicken Coop Lending, Inc.
Legal all depends on who's writing the laws, but ethical… it surely is not.