Pam Martens at Wall Street on Parade reports:
Carmen Segarra, a former Bank Examiner at the Federal Reserve Bank of New York, has brought public attention to a little known job function at her former employer – that of the Relationship Manager. The New York Fed is assigned a priority role in oversight and regulation of some of the largest Wall Street banks. Should it be functioning as a tough cop or managing “relationships”?
In October, Segarra, a lawyer, filed a lawsuit alleging that Relationship Managers at the New York Fed, who were assigned to manage the relationship with Goldman Sachs, obstructed and interfered with her investigation of the firm and tried to bully her into changing her findings. When Segarra refused to change her findings, she was fired, according to the lawsuit.
Read the rest here.
How Hidden Bank Risks Drive Investors to Productive Assets, U.S. Treasuries, and Gold
ReplyDeleteDimon later explained: “In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored.” Dimon understated the situation. JPMorgan broke securities laws. Revelations of JPMorgan’s worst-practices in risk management and misleading disclosures resulted in an admission of wrongdoing and a $920 million SEC fine. JPMorgan shifted blame to “rogue” traders, but the systemic problem seems to be rogue management.
Dimon is now spending billions on an army of accountants and other “risk professionals” to examine JPMorgan. Yet this flurry of activity will not improve the bank’s core risk knowledge, because the global banking system has enormous systemic hidden risk. Dimon’s debacle is not an isolated case.
“The AIG of the World Is Back”
At the end of 2012, Treasury claimed U.S. taxpayers made $5 billion on the massive AIG bailout. But there was another material weakness in accounting for taxpayers’ so-called profit.
The Federal Reserve had gifted Treasury more than 500 million shares of AIG, and AIG also received valuable preferential tax treatment. Taxpayers put capital at risk, and received not merely a negative risk-adjusted return, but an absolute negative return. Taken as a whole, taxpayers lost money.
Banks House Invisible Hedge Funds with Inadequate Capital
http://www.tavakolistructuredfinance.com/2013/12/bank-risk-derivatives-bailouts-gold/