The New York Fed tapes are going to get their day on Capitol Hill.
Sen. Sherrod Brown (D., Ohio) announced Friday that he will hold a hearing on the issue of “regulatory capture” on Nov. 21 in his Senate Banking subcommittee, with the blessing of the Senate Banking Chairman Tim Johnson (D., S.D.).
[UPDATE: New York Fed President William Dudley will testify at the hearing, according to a person familiar with the matter. More details follow at the end of this post.]
The hearing will investigate accusations that Fed regulators are too cozy with the nation’s largest financial institutions, concerns that were stoked by a report last month by nonprofit news organization ProPublica and the “This American Life” radio program. The story featured a secret internal investigation conducted by the Federal Reserve Bank of New York that revealed troubling cultural problems that discouraged bank supervisors from voicing concerns about the firms they oversaw. The stories also featured secretly recorded tapes by a disgruntled ex-employee of supervisory conversations with Goldman Sachs Group Inc.GS +1.02%that raised further questions about how tough New York Fed supervisors are on the firms they supervise.
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