Financial regulators acted deaf, dumb and blind

Posted

To the editor:

You would think that all the 12 district presidents and the chair of the Federal Reserve had to think about was adjusting the Fed funds rate and deciding how much fiat money to print.  That is untrue.  These 13 individuals are responsible for the supervision of the financial services industry in the United States.

It is of interest (to me, anyway) that Citibank had Federal Reserve examiners of the New York Fed stationed at its headquarters eight hours a day, five days a week, 52 weeks a year.  

Those examiners did not report to the New York Fed in the morning and then to Citibank; they went directly to Citibank, as that was their work station.  

A bank runs a balance sheet daily. Those examiners had to be deaf, dumb and blind not to know that Charles Prince, the chairman of Citibank, took that ridiculous position in mortgage backed securities that sunk the bank — a position that was endemic throughout the financial service industry in the United States and the underpinning of the Great Recession.

Those examiners were under the pyramid of Timothy Geithner, president of the New York Fed.  For this extraordinarily shabby job of supervision Mr. Geithner was appointed and confirmed as Secretary of the Treasury. 

Howard Ring    

Federal Reserve, Timothy Geithner, regulation, Howard Ring

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