Financial Regulatory Forum

from MacroScope:

Spitzer: NY Fed “an absolute sinkhole”

To say former New York Governor Eliot Spitzer is no fan of the Federal Reserve Bank of New York would be an understatement.

After arguing financial regulatory reform proposals being discussed in Washington fall short, he said:

"One institution needs to be completely overhauled: The New York Fed," he said.

At a panel in New York,  Spitzer lambasted the  New York Fed as "an absolute sinkhole when it comes to what went on over the past ten years."

"There wasn't a single person there who knew what was going on because this was all one club," Spitzer said.  "Every member of that club wanted to protect what was going on," he said.

US’ Geithner, NY Fed defend actions on AIG payments

By David Lawder and Glenn Somerville

WASHINGTON, Jan 26 (Reuters) – U.S. Treasury Secretary Timothy Geithner denied any role in disclosures about American International Group’s payments to banks and defended his decisions as New York Federal Reserve chief to pay full price to retire AIG credit default swaps.

Geithner, in prepared testimony for a much-anticipated congressional hearing on Wednesday, said protracted demands for concessions from banks in late 2008 could have triggered devastating credit rating downgrades and brought AIG down, with “catastrophic” consequences for the U.S. economy.

Geithner’s testimony is widely seen as important for his future as Treasury chief. He has denied acting in the interests of specific institutions.

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