The Senate Banking Financial Institutions Subcommittee held a contentious hearing grilling the president of the Federal Reserve Bank of New York, William Dudley, on the extent to which his Bank has been “captured” by big financial institutions and has a revolving door that poses serious conflicts of interest. As we anticipated, FRB efforts late Thursday to deflect criticism with a sweeping self-review did not satisfy critics like subcommittee chairman Sherrod Brown (D-OH), Elizabeth Warren (D-MA), and Jeff Merkley (D-OR). Chairman Brown suggested that all of the FRB-NY’s lapses suggest big banks now are “too big to regulate,” adding this to his ongoing view that big banks are too big to fail and Sen. Warren’s that they are too big to jail. Sen. Shelby (R-AL) was not present at the hearing, but GOP-invited witnesses were at least as critical of the Federal Reserve as the Democratic senators.
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