Hey remember when you lost your job and all your assets, or maybe took on tens of thousands dollars in school loans so you could pay for an education that would help you get a part-time job in retail? Remember that? That was fun, right? As you claw your way out of the hole created for you by this crisis, console yourself with the fact that the architects thereof sit on the boards of regulatory institutions charged with deciding if banks, say, get taxpayer dollars. There, don’t you feel better now?
Four years after the financial crisis, and two years after “financial reform,” top bank executives are still allowed to serve on the boards of regional Federal Reserve banks—institutions that are partially responsible for regulating the financial industry. People like Jamie Dimon, the JP Morgan Chase CEO whose term at the New York Fed just ended, have influence over whether banks get bailed out by taxpayers when they screw up. Dimon was on the New York Fed board during the 2008 financial crisis, and his bank got over $390 billion in low-interest emergency bailout loans from the Fed.
Oh yes, JAMIE DIMON, who sits on the board of a regulatory agency even though he thinks that regulations are “anti-American.” Surely he is therefore able to effectively stand between you and the rapacious community of bank executives, of which he is a member. He just decides which policies are sound, and which aren’t, and which are anti-American, and which are cool with him, and he surely does this with the utmost concern for the middle class, so there is nothing to see here.
[Bernie] Sanders announced Wednesday that he will reintroduce legislation to forbid financial industry executives like Dimon from sitting on any of the 12 regional Fed boards of directors.
“The Fed has got to become a more democratic institution that is responsive to the needs of the middle class, not just Wall Street CEOs.” Sanders said.
Last May, Dimon’s bank lost nearly $6 billion on a bad bet, which raised questions about how the risky trade could have gone undetected by regulators like the Fed…A 2011 Government Accountability Office study found that letting members of the banking industry elect and serve on the Federal Reserve’s board of directors creates “an appearance of a conflict of interest.”
Here is what is surprising about all this: that we needed a study to tell us that this “creates an appearance of a conflict of interest.” Also, another surprising thing: that this only supposedly creates an APPEARANCE of a conflict of interest, when clearly a conflict of interest is at hand.