Today, a trio of House Democratic lawmakers called on Republican leadership of the Financial Services Committee to hold a hearing to review the culture and management practices within the Federal Reserve Bank of New York.
Citing a September 26 media report that indicated a risk averse culture where the Federal Reserve was deferential to the very entities it was charged with supervising, Financial Services Committee Ranking Member Maxine Waters (D-CA), Oversight & Investigations Subcommittee Ranking Member Al Green (D-TX), and Rep. Keith Ellison (D-MN) have written to Committee Chairman Jeb Hensarling (R-TX) and Oversight Subcommittee Chair Patrick McHenry (R-NC) to ask for a hearing and additional scrutiny.
“The article raises important questions about whether adequate changes in management and workplace culture have taken place at the Federal Reserve Bank of New York (FRBNY) following the financial crisis and suggests that additional scrutiny is needed to ensure that management practices and workplace culture at the FRBNY do not serve to undermine the effectiveness and integrity of the FRBNY’s supervision of the financial institutions under its purview,” the lawmakers wrote.
In making the request, Waters, Green and Ellison point out “the extensive resources and attention” the Committee has devoted to reviewing the management culture at the Consumer Financial Protection Bureau, and the commitment that has been made to examine the management culture at the Office of the Comptroller of the Currency.
The signed letter can be found here. The text can be found below.
The Honorable Jeb Hensarling
Chairman
Committee on Financial Services
2129 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Patrick T. McHenry
Chairman
Subcommittee on Oversight & Investigations
2129 Rayburn House Office Building
Washington, D.C. 20515
Re: Hearing request concerning allegations at the Federal Reserve Bank of New York
Dear Chairmen Hensarling and McHenry:
In keeping with your stated commitment to examine allegations of dysfunctional workplace culture and management practices within each of the financial regulatory agencies under the Committee’s jurisdiction, we request that you promptly schedule a hearing to review the culture and management practices within the Federal Reserve Bank of New York (FRBNY) highlighted in an article published on September 26th, 2014, entitled “Inside the New York Fed: Secret Recordings and a Culture Clash.”
The article raises important questions about whether adequate changes in management and workplace culture have taken place at FRBNY following the financial crisis and suggests that additional scrutiny is needed to ensure that management practices and workplace culture at the FRBNY do not serve to undermine the effectiveness and integrity of the FRBNY’s supervision of the financial institutions under its purview.
While we recognize and commend the FRBNY for its efforts to improve its supervisory role and draw on the lessons taken from the financial crisis, we believe it is nonetheless incumbent upon this Committee to investigate any existing management and workplace culture deficiencies at the FRBNY given the importance of effective supervision of our financial system, and the seriousness of the allegations made in the September 26th, 2014 article.
We hope that you will honor this hearing request given the extensive resources and attention this Committee has dedicated to reviewing the management culture at the Consumer Financial Protection Bureau, and the commitment that has been made to examine the management culture at the Office of the Comptroller of the Currency.
We have consistently expressed our interest in working in a bipartisan, open and coordinated manner to address cases of inappropriate workplace culture whether they be in the financial services industry, or at any of the financial regulatory agencies under this Committee’s jurisdiction, and it is our hope that the review of any shortcomings in management or workplace culture at the FRBNY be conducted in such a manner.
Thank you for your attention to this important issue and we look forward to your response.
Sincerely,
Hon. Maxine Waters
Ranking Member
Committee on Financial Services
Hon. Al Green
Ranking Member
Subcommittee on Oversight & Investigations
Hon. Keith Ellison
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