Is the Fed Cozying Up to Wall Street?

The transcript discusses the review of big banks' supervision, highlighting the pressure on the New York Fed due to recent media coverage and Senate hearings. It explores the challenges of regulating complex financial institutions and the issues of regulatory capture. The discussion includes incidents like the JP Morgan London Whale trading losses and Goldman Sachs' access to internal documents, suggesting systemic problems rather than isolated incidents. The transcript concludes with an analysis of the weaknesses in bank examinations, particularly in dealing with Goldman Sachs.

What has led to the increased scrutiny on the New York Fed's supervision of big banks?

• A decline in bank profits

• Changes in banking regulations

• Recent media coverage and investigations

• A new financial crisis

What is one of the main challenges in regulating large financial institutions?

• Lack of technology

• Insufficient funding

• Complexity and size of the institutions

• Political interference

What is regulatory capture?

• When banks fail to comply with regulations

• When regulators become too close to the banks they oversee

• When banks capture market share

• When regulators are too strict with banks

What was a significant concern highlighted in the Segarra tapes?

• The technological advancements in banking

• The strength of the banks

• The weakness of examiners in challenging banks

• The profitability of banks

What does the discussion about JP Morgan and Goldman Sachs suggest about the regulatory environment?

• It is highly effective

• It is too lenient on small banks

• It may have systemic issues

• It faces challenges with isolated incidents