An influential U.S. senator wants to hold hearings into "disturbing" issues raised by secretly taped conversations between Federal Reserve supervisors and officials at Goldman Sachs Group Inc , a bank the Fed was tasked with policing.
Elizabeth Warren, a Democrat on the Senate Banking Committee, on Friday called for hearings after portions of the recordings from 2011 and 2012 were made public. Fellow Democrat Sherrod Brown, also a committee member, called for a "full and thorough investigation" into the allegations they raised.
Carmen Segarra, a former New York Fed bank examiner who brought a wrongful termination lawsuit against her former employer, recorded the conversations and provided them to the investigative news outlet ProPublica and the public radio show "This American Life" to illustrate what she saw as an inappropriately close relationship between regulator and bank.
The tapes appear to show an unwillingness among some Fed supervisors to both demand specific information from Goldman about a transaction with Banco Santander and to strongly criticize what Segarra concluded was the lack of an appropriate conflict-of-interest policy at Goldman.
Political interest in the recordings could feed suspicion among Americans that little has changed on Wall Street since bank regulators failed to identify and stop the risk-taking that led to the 2007-2009 financial crisis and deep U.S. recession.
