In early fall 1991, shortly after the revelation of Salomon Brothers' hanky-panky in the Treasury notes market, the staff of the House Banking Committee held an exploratory meeting with some officers of the Federal Reserve Bank of New York to discuss what Congress could do to avoid a repetition of this scandal.

The tenor of the talk grew to be too much for one of the senior Fed people present, who shouted at the staffers, "You don't understand. People don't lie to the Federal Reserve Bank of New York" - which drew the astonished reply, "Why not? They lie to us all the time."

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