Michael Lewis: Fed Tapes Show Regulators Controlled By Banks

Michael Lewis at Bloomberg View reports on a This American Life story on 46 hours of tapes secretly recorded by a Fed employee embedded at Goldman Sachs.  An excerpt from Lewis's story:

* * * In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that "once clients are wealthy enough certain consumer laws don't apply to them." After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement — to which the regulator replied, "You didn't hear that."

* * *
You sort of knew that the regulators were more or less controlled by the banks. Now you know.

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