New York Fed Responds To Neil Barofsky
After one of the most scathing reports ever written about FRBNY's pandering to its Wall Street lobby interest, it was only a matter of time before the NY Fed put some lip service to protecting itself as an "independent" organization. Some of the points from the report:
We believe that the Federal Reserve acted appropriately in conducting these negotiations and that our negotiating strategy, including the decision to treat all counterparties equally [and Goldman more qually than more], was not flawed or unreasonably limited. After the U.S. Government had determined that AIG was systemically important and had acted to prevent its disorderly failure, it was natural for all of AIG's creditors, including its counterparties on multi-sector CDS, to expect full payment from the company and to believe that the company would noe be in a position to demand concession from its counterparties on their claims.
Once again FRBNY: please look up the term "moral hazard" in the OED and tell us whose picture (hint Tim Geithner) accompanies the definition.
Yet what is most refreshing is that even the FBRNY now seems to acknowledge the need for the passage of the Audit The Fed bill:
The Report addresses the value of transparency, which we share. We have taken a number of significant steps with the objective of increasing the information publicly available about the Federal Reserve and its lending programs so that the Congress and the public can more effectively assess our efforts in pursuit of [making Goldman Sachs the overlord of the Milky Way Galaxy, as the earth has long been taken over] financial stability and monetary policy objectives. Among these steps is regular publication on our website of comprehensive information about ML III and other Federal Reserve facilities. Altogether, we now provide more information about the operations of the Federal Reserve than ever before, and we continue to explore whether additional information can be provided without jeopardizing the effectiveness of our efforts.
We agree. We must audit you immediately. And legislation has to pass to that extent now, and not be delayed by Barney Frank or castrated by BofA lap dog Mel Watt.