Sen. Sherrod Brown grills Federal Reserve Bank on its oversight practices

Cleveland Plain Dealer

WASHINGTON, D.C. -- Ohio Democratic Sen. Sherrod Brown on Friday accused the Federal Reserve Bank of New York of lax oversight and coziness with Wall Street banks that's led to failure to protect consumers.

"It is bad enough when banks can capture the agencies that regulate them or the Congress that oversees those agencies," said Brown, who chairs the Senate Banking Subcommittee on Financial Institutions and Consumer Protection. "But it is worse when they don’t even have to, because the agencies handcuff themselves, or public servants attempt to curry favor with the companies that they supervise."

Brown and other Democrats at the hearing grilled New York Federal Reserve Bank President William Dudley over recent reports the Federal Reserve missed signs of irresponsible trading that cost J.P. Morgan Chase $6 billion, that one of its former examiners was asked to restrain a probe of Goldman Sachs, and that a different ex-employee passed confidential Federal Reserve information to Goldman Sachs after accepting a job at the investment bank.

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Sen. Sherrod Brown grills Federal Reserve Bank on its oversight practices »