Secret New York Fed Recordings Released; U.S. Bank Fined

Receiving Wide Coverage....

Secret Fed Tapes: Here's all you need to pique your interest: It's the "Ray Rice video for the financial sector," according to none other than Michael Lewis, columnist and author of "The Big Short." A former New York Fed bank examiner secretly took a key-chain voice recorder into 47 hours of Fed meetings, recorded what she heard and gave the recordings to a reporter at ProPublica, which later distributed the recordings to National Public Radio and to Lewis, who writes about it for Bloomberg. Among the things the former Fed employee, named Carmen Segarra, heard were Fed officials discussing a transaction between Goldman Sachs and Banco Santander, and describing the transaction as "legal but shady." Other parts of the recordings indicate that Fed employees were essentially told to obey orders from their superiors, who in turn knew that they were to do the big banks' bidding, Lewis writes. The verdict from the recordings, according to Lewis: "You sort of knew that the regulators were more or less controlled by the banks. Now you know."

Wall Street Journal

The Journal takes a look at big banks' trepidation with Fed Vice Chair Thomas Hoenig (although the Journal article utilizes the ambiguous and misleading term "Wall Street" to broadly refer to the largest FDIC-insured banks). The article uses a quote that Hoenig made Tuesday at American Banker's Regulatory Symposium (again without crediting American Banker) to set up its premise: "My major worry is the perception that, since the passage of the [2010 Dodd-Frank] Act, we have really become a much more sound and stable financial system. I question that," Hoenig said. Then the article segues to Tim Pawlenty of the Financial Services Roundtable. Back in March, Pawlenty said that Dodd-Frank made taxpayer bailouts illegal, but "many policy makers look at that and say... 'I choose not to believe what's written on the paper.'" The article includes other small nuggets about Hoenig, many of which are already familiar to American Banker readers, such as the fact that he's embraced by both the Republicans who nominated him to a seat on the FDIC board, and by Sen. Elizabeth Warren, D-Mass., who said, "Tom Hoenig has the right approach to financial regulation."

Financial Times

Six banks, including Citigroup and JPMorgan Chase, are in talks with British regulators over fines for their roles in foreign exchange manipulation. Each bank faces a fine in the "hundreds of millions of pounds." The other four banks are Barclays, HSBC, Royal Bank of Scotland and UBS. The talks are with the U.K.'s Financial Conduct Authority and don't include U.S. regulators.