Sen. Warren Discusses Fed, Carmen Segarra, Goldman Sachs

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Transcript: Sen. Warren’s Full NPR Interview On Financial Regulation by

NPR’s Steve Inskeep interviewed Sen. Elizabeth Warren about the audio tapes made by Carmen Segarra, a Federal Reserve Bank of New York investigator who was examining Goldman Sachs. A full transcript of the interview follows:

STEVE INSKEEP: You described what you learned from this report as disturbing. What’s disturbing about it?

ELIZABETH WARREN: Well, ultimately this report tells us exactly what we already knew — that the relationship between regulators and the financial institutions they oversee is too cozy to provide the kind of tough oversight that’s really needed.

Source: Wikimedia Commons

How is it too cozy? Because of course we hear the regulators on these tapes saying: “There’s a reason that we’re trying to have good relationships with banks like Goldman Sachs — we want to know what’s going on, we want to get information.”

Elizabeth Warren: Oh, golly. So, look — listen, though, to those tapes. For me, there were two things that jumped out. The first was just a basic lack of truthful reporting: Supervisors are actually telling examiners not to report accurately the damning things they heard from bank executives during meetings. I mean, wow. If there’s not even an accurate record of what’s going on, then the regulators can’t hope to do their jobs.

And the second thing: Look at how the Fed emphasized talk instead of action. You know, the regulators seemed to think that it was a victory just to raise an issue, even if they took absolutely no action to address the issue. And that’s the kind of approach that allowed banks to take on massive risks before the financial crisis.

You know, think about that: The regulators seemed to think that fussing at banks behind closed doors was their toughest sanction. Does anyone believe that Goldman Sachs is gonna give up a deal that would yield millions of dollars because someone fussed at them behind closed doors?

Video below full transcript at link above

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