Pam Martens of Wall Street on Parade does not think highly of the NY Federal Reserve Bank. She finds it hard to accept that many of the board directors are the CEOs of TBTF (Too Big To Fail) banks such as Citicorp and JPMorgan. Now she asks the question of why the NY Fed has a trading floor and highly sophisticated trading platforms; it's the only Fed bank that does. And the trading floor seems to be a very special place as the Fed will not provide a photo of the full trading area, yet its web site shows photos of its gold vault and currency vault.
She quotes approvingly from a speech by the bank president, William Dudley, “There is evidence of deep-seated cultural and ethical failures at many large financial institutions. Whether this is due to size and complexity, bad incentives or some other issues is difficult to judge, but it is another critical problem that needs to be addressed. Tough enforcement and high penalties will certainly help focus management’s attention on this issue. But I am also hopeful that ending too big to fail and shifting the emphasis to longer-term sustainability will encourage the needed cultural shift necessary to restore public trust in the industry.”
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