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Tuesday, September 30, 2014

The New York Fed: A Case of Regulatory Capture

According to The Wall Street Journal, a study sponsored by the Federal Reserve Bank of New York in 2009 uncovered “a culture of suppression that discouraged regulatory staffers from voicing worries about the banks they supervised.”[1] Whereas the report points to excessive risk aversion and group-think as the underlying problems, a fuller explanation is possible—one with clear implications for public policy.

The full essay is at "The New York Fed"



1. Pedro N. Da Costa, “N.Y. Fed Staff Afraid to Speak Up, Secret Review Found,” The Wall Street Journal, September 28, 2014.