MURDER, POLITICS, AND THE END OF THE JAZZ AGE
by Michael Wolraich
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Fed Up
By EmmaZahn on Wed, 06/13/2012 - 11:15am |
...As one of 12 regional reserve banks that make up the Federal Reserve, the New York Fed's responsibilities include regulating big Wall Street banks like JPMorgan and Goldman Sachs. If Dimon sitting on the organization's board sounds like a conflict of interest to you, you're right: Nearly four years after the implosion of Lehman Brothers triggered a global economic meltdown, the fox is still guarding the henhouse.
JPMorgan's trading loss has already prompted many calls for Dimon's ouster from the Fed board. Treasury Secretary Timothy Geithner, who previously headed the New York Fed, conceded in mid-May that Dimon had a "perception problem," and Senate Democrats have explicitly called on the JPMorgan chief to step down from the board. In late May, Esther George, the president of the Kansas City Fed, made the same point more obliquely, noting that "when an individual no longer meets these [high] standards, the director resigns voluntarily to allow someone who does meet the criteria to serve."
I couldn't agree with George more. At the same time, her suggestion brings up a larger point: Why stop at Dimon? The entire system by which Wall Street banks are regulated needs to change, and urgently.
URL:
http://www.foreignpolicy.com/articles/2012/06/12/fed_up?page=full
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