A year later, Congress gave the Federal Reserve even more oversight authority. And the New York Fed started hiring specialized examiners to station inside the too-big-to fail institutions, those that posed the most risk to the financial system.
One of the expert examiners it chose was Carmen Segarra.
Segarra appeared to be exactly what Beim ordered. Passionate and direct, schooled in the Ivy League and at the Sorbonne, she was a lawyer with more than 13 years of experience in compliance – the specialty of helping banks satisfy rules and regulations. The New York Fed placed her inside one of the biggest and, at the time, most controversial banks in the country, Goldman Sachs.
It did not go well. She was fired after only seven months.
As ProPublica reported last year, Segarra sued the New York Fed and her bosses, claiming she was retaliated against for refusing to back down from a negative finding about Goldman Sachs. A judge threw out the case this year without ruling on the merits, saying the facts didn’t fit the statute under which she sued.
At the bottom of a document filed in the case, however, her lawyer disclosed a stunning fact: Segarra had made a series of audio recordings while at the New York Fed. Worried about what she was witnessing, Segarra wanted a record in case events were disputed. So she had purchased a tiny recorder at the Spy Store and began capturing what took place at Goldman and with her bosses.
Segarra ultimately recorded about 46 hours of meetings and conversations with her colleagues. Many of these events document key moments leading to her firing. But against the backdrop of the Beim report, they also offer an intimate study of the New York Fed’s culture at a pivotal moment in its effort to become a more forceful financial supervisor. Fed deliberations, confidential by regulation, rarely become public.
The recordings make clear that some of the cultural obstacles Beim outlined in his report persisted almost three years after he handed his report to Dudley. They portray a New York Fed that is at times reluctant to push hard against Goldman and struggling to define its authority while integrating Segarra and a new corps of expert examiners into a reorganized supervisory scheme.
Obama Defends Goldman Sachs & Derivatives Demand EU Include them in Free Trade and Cannot Regulate US Banks
Obama is defending Goldman Sachs & of NY Bankers in their bid to include Derivatives in the free trade agreement with Europe and to ensure they cannot be regulated by Europe. Obama insists, at the bank’s request, that to subject US banks to EU regulation will complicate the regulatory landscape unnecessarily. The banks are lobbying hard for that position from the White House. Obama wants derivatives IN EVERY MARKETglobally to be exempt from foreign regulators just in time for the next bubble. Obama argues they are hedges against exchange rate fluctuations, but derivatives also bet on purchases of real estate and mortgages, commodities, food, their sales or purchases in the future. This includes the toxic bombs that wiped out so many banks – mortgage derivatives, including the so-called CDO’s (mortgage insurance).