Tarullo, Obama’s First Fed Pick, Leads Supervision Overhaul

Federal Reserve Governor Daniel Tarullo, President Barack Obama’s first pick to the U.S. central bank’s board, is leading an overhaul of its bank examinations, aiming to identify potential threats across the industry.

The initiative is aimed at providing an “independent perspective for what is going on among big institutions, but also in the system,” Tarullo said in an interview. It goes beyond the previous reliance on analysis of bank examiners deployed by the Fed’s district banks, using the staff of the Fed’s board in Washington as a new layer of oversight.

This is bizarre stuff. On some days Tarullo wears the hat of Fed governor and sits on the board that actually causes the boom/busty cycle to occur through the monetary manipulations it conducts. On days he is not doing this, he is creating "a new layer of oversight" to micro-mange the banking sector in an attempt to prevent the boom/bust cycle that occurs as a result of the decisions Tarullo makes when he is playing his role in the money manipulation.

Of course, any new regs will be skewed to benefit Obama's cronies. That's clearly how Obama plays the game. Remember Carlyle Group and other PE firms are eyeing small banks. Will a tweaking of the regs move these acquisitions along (and on the cheap) by making it near impossible for many small banks to survive on their own?