Recordings reveal NY Fed’s deference to banks: Report

After failing to prevent the financial crisis in 2008, the Federal Reserve Bank of New York hired a new round of bank examiners who were charged to enforce regulations at banks.

One of the examiners was Carmen Segarra, who was hired in 2011 then fired seven months into her job—but not before she secretly recorded 46 hours worth of meetings and conversations with her colleagues, reported ProPublica.

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The recordings reveal a conflict of interest between the Fed and the banks it oversees.

In one recording, Segarra’s boss tries to persuade her to change a negative review she wrote about Goldman Sachs, the bank she was tasked to oversee. She was eventually fired. Segarra sued her bosses and the Fed claiming she was fired in retaliation for that negative review.

A judge threw the suit out without ruling on the case’s merits.

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The New York Fed wrote in a statement that “The decision to terminate Ms. Segarra’s employment with the New York Fed was based entirely on performance grounds, not because she raised concerns as a member of any examination team about any institution.”

In a statement to ProPublica and This American Life, the New York Fed said it “categorically rejects the allegations being made about the integrity of its supervision of financial institutions.”

Read the full story on ProPublica.

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