Courtesy of Pam Martens
New York Fed Building in Lower Manhattan
There is now a movement in Congress to strip the Federal Reserve Bank of New York of its regulatory oversight of the biggest Wall Street banks. The movement has roots among both Democrats and Republicans who are fed up with the continuing unbridled abuses of the public trust by the unruly hooligans on Wall Street and their timid regulator, the New York Fed.
The push for change is critically important for a number of reasons. Major among them is the perception that New York and its politicians are more concerned about what’s in the best interests of New York residents and less about what’s best for the country as a whole. Two trillion dollar too-big-to-fail banks may pose a systemic risk for the nation but they’re a handy source of quick, mega loans for the hedge funds and real estate interests in New York, whose employees’ free-spending ways are a boon to the pricey restaurants and upscale stores that dot the Manhattan landscape.
No two individuals have exemplified the hubris of the New York politician’s way of thinking better than Senator Chuck Schumer and former Mayor Michael Bloomberg, a billionaire whose fortune derives from Wall Street.
Just one year before Wall Street’s deregulated landscape would usher in the greatest financial collapse since 1929, Schumer and Bloomberg were pushing for greater deregulation of Wall Street. The two hired McKinsey & Company to study any threats that might be lurking to New York City’s global dominance in financial services.
On January 22, 2007, the pair released the McKinsey report, titled: “Sustaining New York’s and the US’ Global Financial Services Leadership.” In a press release announcing the report, Bloomberg stated: “Our capital markets and financial services firms will only enjoy continuing growth — growth that our city expects, needs and demands — if we take seriously the challenges from rapidly-expanding competitors in Europe and Asia.”
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