Federal Reserve System (FED)
- Homepage: http://www.federalreserve.gov/
February 2002: "The Federal Reserve, the central bank of the United States, was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Today the Federal Reserve's duties fall into four general areas:
- conducting the nation's monetary policy;
- supervising and regulating banking institutions and protecting the credit rights of consumers;
- maintaining the stability of the financial system; and
- providing certain financial services to the U.S. government, the public, financial institutions, and foreign official institutions."
December 2013: "Governments and regulatory agencies in the United States and Europe have been gradually moving to restrict speculation by major banks. The Federal Reserve, concerned about the risks, is reviewing whether it should tighten regulations and limit the activities of banks in the commodities world."http://www.nytimes.com/2013/12/28/business/academics-who-defend-wall-st-reap-reward.html
November 2013: "The case began as a dispute over faulty loans between Bank of America and a group of institutional investors who held the Countrywide securities, including BlackRock, Pimco and the Federal Reserve Bank of New York. Early in settlement talks, Bank of America suggested bringing all investors in the 530 Countrywide trusts into the deal. Bank of New York Mellon agreed. This meant that even though the absent investors were not represented by lawyers at the bargaining table, they would be forced to abide by the terms of the settlement. Unlike the process that occurs in a class action, there was no opting out of this deal."http://www.nytimes.com/2013/11/17/business/who-has-your-back-hard-to-tell.html
June 2013: "The lack of regulation in the payroll card market, while alluring for some of the issuers, can potentially leave cardholders swimming in fees. Take the example of inactivity fees that penalize customers for infrequently using their cards. The Federal Reserve has banned such fees for credit and debit cards, but no protections exist on prepaid cards. Cards used by more than two dozen major retailers have inactivity fees of $7 or more, according to a review of agreements."http://www.nytimes.com/2013/07/01/business/as-pay-cards-replace-paychecks-bank-fees-hurt-workers.html
January 2013: 'What's most amazing about this isn't that Citi got so much money, but that government-endorsed, fraudulent health ratings magically became part of its bailout. The chief financial regulators – the Fed, the FDIC and the Office of the Comptroller of the Currency – use a ratings system called CAMELS to measure the fitness of institutions. CAMELS stands for Capital, Assets, Management, Earnings, Liquidity and Sensitivity to risk, and it rates firms from one to five, with one being the best and five the crappiest. In the heat of the crisis, just as Citi was receiving the second of what would turn out to be three massive federal bailouts, the bank inexplicably enjoyed a three rating – the financial equivalent of a passing grade. In her book, Bull by the Horns, then-FDIC chief Sheila Bair recounts expressing astonishment to OCC head John Dugan as to why "Citi rated as a CAMELS 3 when it was on the brink of failure." Dugan essentially answered that "since the government planned on bailing Citi out, the OCC did not plan to change its supervisory rating." Similarly, the FDIC ended up granting a "systemic risk exception" to Citi, allowing it access to FDIC-bailout help even though the agency knew the bank was on the verge of collapse.'http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104
November 2012: "Many Americans probably think the Dodd-Frank financial reform law will protect taxpayers from future bailouts. Wrong. In fact, Dodd-Frank actually widened the federal safety net for big institutions. Under that law, eight more giants were granted the right to tap the Federal Reserve for funding when the next crisis hits. At the same time, those eight may avoid Dodd-Frank measures that govern how we’re supposed to wind down institutions that get into trouble."http://www.nytimes.com/2012/11/04/business/one-safety-net-that-needs-to-shrink.html
December 2011: "And in 2008, in that moonlighting capacity, he orchestrated a deal in which the Fed provided $29 billion in assistance to help his own bank, Chase, buy up the teetering investment firm Bear Stearns. You read that right: Jamie Dimon helped give himself a bailout. Who needs to worry about good government, when you are the government?"http://www.rollingstone.com/politics/blogs/taibblog/a-christmas-message-from-americas-rich-20111222
October 2011: 'However, that lower price was still much too high, as the Federal Reserve well knew. The Fed had been established in 1913 in large measure to end the then widespread practice of banks’ charging a similar “interchange” fee for the use of paper checks. Those check interchange fees were slowing the growth of interstate commerce, and the Fed quickly prohibited them. The interchange fees that banks now charge stores for debit transactions are economically and functionally identical to the check interchange fees prohibited by the Fed almost a century ago.'http://www.nytimes.com/2011/10/07/opinion/debit-card-fees-are-robbery.html
July 2011: "What made the news surprising, of course, was that the Federal Reserve has rarely, if ever, taken action against a bank for making predatory loans. Alan Greenspan, the former Fed chairman, didn’t believe in regulation and turned a blind eye to subprime abuses. His successor, Ben Bernanke, is not the ideologue that Greenspan is, but, as an institution, the Fed prefers to coddle banks rather than punish them. That the Fed would crack down on Wells Fargo would seem to suggest a long-overdue awakening."http://www.nytimes.com/2011/07/26/opinion/26nocera.html
April 2011: 'Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.'http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411
May 2010: "The Durbin amendment gives the Federal Reserve new authority to regulate and limit the fees that businesses pay to card companies,. It specifically addresses payments processed through the Visa and MasterCard networks. American Express and Discover cards are not covered by the bill."http://www.nytimes.com/2010/05/15/business/15credit.html
January 2010: "While Congress and the Federal Reserve Board are considering eliminating some of the incentives brokers have to gouge borrowers, your best move is to hire a real-estate attorney to represent you in arranging the loan and purchase—a $500 to $2,000 expense. That's a good investment; foreclosure rates in the nine states requiring attorneys for real-estate transactions have been running at about one-fifth the national average."http://www.aarpmagazine.org/money/consumer_confidential.html
February 2010: "This week, the second phase of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (also known as the Credit CARD Act), which put into place a number of consumer protections, went into effect...the Federal Reserve has created an interactive Web site (http://www.federalreserve.gov/creditcard) to help cardholders understand the new safeguards."http://www.washingtonpost.com/wp-dyn/content/article/2010/02/24/AR2010022405094.html
February 2010: "In fact, the Fed became not just a source of emergency borrowing that enabled Goldman and Morgan Stanley to stave off disaster — it became a source of long-term guaranteed income. Borrowing at zero percent interest, banks like Goldman now had virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they borrowed from the government at zero percent and lent it back to the government by buying Treasury bills that paid interest of three or four percent. It was basically a license to print money — no different than attaching an ATM to the side of the Federal Reserve."http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle
September 2009: "But during the years of the housing boom, the pleas failed to move the Fed, the sole federal regulator with authority over the businesses. Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies."http://www.washingtonpost.com/wp-dyn/content/article/2009/09/26/AR2009092602706.html
July 2009: "THE Federal Reserve has long been the odd man out in the American system of government — powerful, yet designed to be nonpolitical and neither checked nor balanced. Now two contradictory crosscurrents are swirling in Washington — one that would enhance the Fed’s powers and one that would curtail them."http://www.nytimes.com/2009/07/26/business/economy/26view.html
June 2009: "The administration’s plan, unveiled on Wednesday, would give the Federal Reserve greater supervisory authority over large financial institutions whose problems pose potential risks to the economic system. It would also expand the reach of the Federal Deposit Insurance Corporation to seize and break up troubled institutions. And it would create a council of regulators, led by the Treasury secretary, to fill in regulatory gaps."http://www.nytimes.com/2009/06/21/us/politics/21radio.html
July 2008: "[Treasury secretary Paulson's plan] Congress would lose some of its authority to oversee the companies, Fannie Mae and Freddie Mac....In recent days, the administration has proposed that the new regulator consult with the Federal Reserve, which looks at larger systemic risks. Congressional aides were discussing late last week whether the legislation should include that provision, which, in any event, does not give the Fed significant authority to alter new regulations."http://www.nytimes.com/2008/07/21/washington/21fannie.html
July 2008: "The sprawling financial and economic crisis is leading to expansion of the Federal Reserve's role, increasingly turning the central bank into a sort of all-purpose guarantor of the financial system."http://www.washingtonpost.com/wp-dyn/content/article/2008/07/16/AR2008071602655.html
March 2008: "•The Federal Reserve intervened to prevent the sudden collapse of Bear Stearns, an investment bank. But the Fed took on $29 billion worth of risk from JPMorgan Chase (which plans to buy Bear). That could expose the Fed – and by extension taxpayers – to a loss. The Fed is making other low-interest loans to Wall Street firms."http://www.csmonitor.com/2008/0331/p01s01-usec.html
June 2007: The Federal Trade Commission and the Federal Reserve were targeted in a House hearing to examine how errors occur on credit reports and how to assist consumers in correcting them. Congress passed legislation in 2003 that protected consumers against credit errors, but neither has been fully implemented by the six regulatory agencies that cooperate to translate laws into industry standards.http://www.washingtonpost.com/wp-dyn/content/article/2007/06/19/AR2007061902220.html
June 2007: The US Federal Reserve got into the act last month, proposing more relevant and readable disclosure of credit card terms.http://www.csmonitor.com/2007/0604/p17s02-wmgn.htm
May 2007: But the Federal Reserve disagreed. It changed its rules to place greater responsibility on banks that first accept unsigned checks, but has permitted their continued use.http://www.nytimes.com/2007/05/20/business/20tele.html
Role Name Type Last Updated Financial Supporter of (past or present) Bear Stearns Companies Organization Mar 18, 2008 Cooperation (past or present) Bureau of Engraving and Printing (BEP) Organization Dec 15, 2008 Research/Analysis Subject Inner City Press (ICP) Organization Feb 24, 2008 Owned by (partial or full, past or present) US Federal Government - Independent Agencies Organization May 4, 2005 Opponent (past or present) Wells Fargo Financial Organization Aug 6, 2011 Organization Executive (past or present) Organization Head/Leader (past or present) Ben S. Bernanke Ph.D. Person Apr 28, 2006 Employee/Freelancer/Contractor (past or present) Prof. Sandra E. Black Ph.D. Person Mar 27, 2008 Organization Executive (past or present) Timothy F. Geithner Person Jun 20, 2009 Organization Head/Leader (past or present) Dr. Alan Greenspan Person Research/Analysis Subject Prof. Stephen K. Happel Ph.D. Person Apr 10, 2010 Advised by (past or present) Prof. Robert C. Hockett Esq. Person Jul 30, 2013 Possible/Unclear Ray Lee Hunt Person Sep 28, 2007 Employee/Freelancer/Contractor (past or present) Prof. Cornelius Hurley Esq. P.M.D. Person May 19, 2010 Advised by (past or present) Prof. Patricia A McCoy Esq. Person Mar 26, 2010 Advised by (past or present) Edmund "Ed" Mierzwinski Person Nov 4, 2005 Employee/Freelancer/Contractor (past or present) Prof. Alicia H. Munnell Ph.D. Person Aug 17, 2006 Organization Executive (past or present) Alice A. Rivlin Ph.D. Person Mar 26, 2010 Advised by (past or present) Prof. Roy A. Schotland Person Sep 15, 2006 Advised by (past or present) Prof. Robert J. Shiller Person Jul 24, 2009 Advised by (past or present) John Taylor Person Apr 20, 2008 Employee/Freelancer/Contractor (past or present) Edwin M. Truman Person Jun 23, 2011 Organization Head/Leader (past or present) Paul A. Volcker Person Organization Executive (past or present) Janet L. Yellen Person Jul 29, 2013
Articles and Resources
Date Fairness.com Resource Read it at: Dec 27, 2013 Academics Who Defend Wall St. Reap Reward
QUOTE: major players on Wall Street and elsewhere have been aggressive in underwriting and promoting academic work. The efforts by the financial players, the interviews show, are part of a sweeping campaign to beat back regulation and shape policies that affect the prices that people around the world pay for essentials like food, fuel and cotton.
New York Times Nov 16, 2013 Who Has Your Back? Hard to Tell
QUOTE: what’s really on trial here is the role played in the settlement by Bank of New York Mellon, the trustee charged with protecting all investors in these securities. Trustees for asset-backed securities have a duty to ensure that the companies administering them, known as servicers, do right by the investors who own them. But testimony in the case, known as an Article 77 proceeding, indicates that during months of settlement talks, Bank of New York Mellon did not do all it could to ensure that all investors holding the Countrywide securities got the best deal possible from Bank of America.
New York Times Jun 30, 2013 Paid via Card, Workers Feel Sting of Fees
QUOTE: in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up....For banks that are looking to recoup billions of dollars in lost income from a spate of recent limits on debit and credit card fees, issuing payroll cards can be lucrative — the products were largely untouched by recent financial regulations.
New York Times Feb 10, 2013 Complex Investments Prove Risky as Savers Chase Bigger Payoff
QUOTE: Regulators across the country are confronting a wave of investor fraud that is saddling retirement savers with steep losses on complex products that until a few years ago were pitched only to the most sophisticated investors. The victims are among the millions of Americans whose mutual funds and stock portfolios plummeted in the wake of the financial crisis, and who started searching for ways to make better returns than those being offered by bank deposits and government bonds with minuscule interest rates.
New York Times Jan 04, 2013 Secret and Lies of the Bailout:The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come
QUOTE: Not only did [the 2009 banking system bailout--Ed.] prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right? Wrong. It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences.
Rolling Stone Dec 01, 2012 As Companies Seek Tax Deals, Governments Pay High Price
QUOTE: states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains. The cost of the awards is certainly far higher....A portrait arises of mayors and governors who are desperate to create jobs, outmatched by multinational corporations and short on tools to fact-check what companies tell them....Many of the officials said they feared that companies would move jobs overseas if they did not get subsidies in the United States. Over the years, corporations have increasingly exploited that fear, creating a high-stakes bazaar where they pit local officials against one another to get the most lucrative packages.
New York Times Nov 03, 2012 One Safety Net That Needs to Shrink (Fair Game)
QUOTE: ...Dodd-Frank actually widened the federal safety net for big institutions. Under that law, eight more giants were granted the right to tap the Federal Reserve for funding when the next crisis hits. At the same time, those eight may avoid Dodd-Frank measures that govern how we’re supposed to wind down institutions that get into trouble.
New York Times Dec 22, 2011 A Christmas Message From America's Rich
QUOTE: The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government....nobody even minds that they are rich. What makes people furious is that they have stopped being citizens.
Rolling Stone Oct 06, 2011 Charging for Debit Cards Is Robbery
QUOTE: When Bank of America told its customers recently that it would start charging them $5 a month to use debit cards, it argued that it was forced to make that change because of regulations that altered the economics of the cards....But the banks’ simplistic statements are merely an attempt to rationalize and obfuscate one of the largest illegal transfers of wealth from consumers to banks in American history.
New York Times Jul 25, 2011 This Is Considered Punishment? (Op-Ed)
QUOTE: for anyone still hoping for justice in the wake of the financial crisis, the news was hardly encouraging. First, the Fed did not force Wells Fargo to admit guilt — and even let the company issue a press release blaming its wrongdoing on a “relatively small group.” The $85 million fine was a joke; in just the last quarter, Wells Fargo’s revenues exceeded $20 billion.
New York Times Apr 27, 2011 A.I.G. to Sue 2 Firms to Recover Some Losses
QUOTE: A.I.G. is preparing several suits against banks, like Bank of America and Goldman Sachs, that created the $40 billion in mortgage bonds… The company says it believes the banks issued misleading statements about the quality of the mortgages within those bonds.
New York Times Apr 12, 2011 The Real Housewives of Wall Street
QUOTE: What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy... It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure.
Rolling Stone Feb 05, 2011 Stock-Hedging Lets Bankers Skirt Efforts to Overhaul Pay
QUOTE: But it turns out that executives have a way to get around those best-laid plans. Using complex investment transactions, they can limit the downside on their holdings, or even profit, as other shareholders are suffering.
New York Times May 14, 2010 Debit Fee Cut Is a Rare Loss for Big Banks
QUOTE: Retailers have begged Congress for years, in vain, to limit the fees they must pay to banks when customers swipe credit or debit cards...That long record of futility ended in a landslide Thursday night. Sixty-four senators, including 17 Republicans, agreed to impose price controls on debit transactions over the furious objections of the beleaguered banking industry.
New York Times Apr 03, 2010 How Washington Abetted the Bank Job
QUOTE: Mr. Bernanke said the Fed had known nothing about this....The collapse of Enron back in 2001 revealed that the biggest financial institutions, here and abroad, were busy creating products whose sole purpose was to help companies magically transform their debt into capital or revenue.
New York Times Feb 25, 2010 Second phase of Credit CARD Act changes begins (The Color of Money)
QUOTE: here we are in 2010, contending with a new law aimed at helping cardholders who have gotten deeply into debt for stuff they could not afford and have been kept there by lenders' policies.
Washington Post Feb 17, 2010 Wall Street's Bailout Hustle: Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash
QUOTE: there's still a widespread misunderstanding of how exactly Wall Street "earns" its money, with emphasis on the quotation marks around "earns." The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street's eye-popping profits come from, exactly?
Rolling Stone Jan 01, 2010 Consumer Confidential
QUOTE: Do you know when you're being hustled by bankers, mortgage brokers, and investment peddlers? Check out our tip sheet on financial pros' everyday deceptions—and how to protect yourself against them
AARP Bulletin Oct 05, 2009 Report on Bailouts Says Treasury Misled Public
QUOTE: The inspector general who oversees the government’s bailout of the banking system is criticizing the Treasury Department for some misleading public statements last fall and raising the possibility that it had unfairly disbursed money to the biggest banks.
New York Times Sep 27, 2009 As Subprime Lending Crisis Unfolded, Watchdog Fed Didn't Bother Barking (Banking on the Fed)
QUOTE: Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies.
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