The way that regional Federal Reserve boards are chosen leads to an inherent conflict of interest, says the Government Accountability Office in a new audit of the Fed. In a brilliant management move, each Fed board picks its members from local businesspeople and bankers. The problem, though, is that the bankers who are on the board help decide what the regulations on the banks that they work for should be.
According to the Washington Post, this means that "executives from Goldman Sachs, J.P. Morgan Chase, General Electric and other firms sat on the boards of regional Federal Reserve banks while their firms benefited from the central bank's policies during the financial crisis." In a particularly embarrassing example, the person who handled the bailout of Goldman Sachs had stock in none other than Goldman Sachs. No wonder everyone is so upset at Wall Street.
Read more: http://www.care2.com/causes/bankers-decide-their-own-regulations.html#ixzz1bQpx0tKY
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