Banks Too Big To Jail: A Systemic Conflict of Interest

When a blatant conflict of interest is ensconced in a regulatory system, the public can expect to be insufficiently protected from being harmed. Such a people is probably too tolerant of such conflicts, or else too weak to effectively counter the concentrated power of the vested interests benefitting from the sordid design. I submit that the relationship between U.S. banks and the Federal Reserve is plagued by a clear conflict of interest, and furthermore that the refusal of the Fed and the U.S. Justice Department to go after fraud committed at the big banks is a direct result.

The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

Timothy Geithner: A Regulator Beholden to a Bank?

In her article in The New York Times, Gretchen Morgenson raises the possibility that Tim Geithner, president of the New York Federal Reserve from 2003 to early 2009 and U.S. Treasury Secretary during Obama’s first term, was a captured regulator, “a man locked into the mind-set of the very bankers he was supposed to oversee.”[1] I contend that while a shared mindset was part of the mix, he was actively doing the bidding of Wall Street, and one bank in particular, which he owed big time. That is to say, it is not just that he worked with Republicans such as Ben Bernanke, chairman of the Fed, and Henry Paulson, Bush’s Treasury Secretary. There is more to it in him being portrayed throughout his confirmation hearing for Treasury as “a tool of Wall Street.”[2]

The full essay is at "Geithner.

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1. Gretchen Morgenson, “Geithner, Staying on Script,” The New York Times, May 17, 2014.

2. Timothy Geithner, Stress Test (Random House: New York, 2014), p. 2.