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The Secret Fed Tapes of Carmen Segarra

The Federal Reserve Bank of New York is one of the world’s most powerful financial regulators, charged by Congress and the Federal Reserve Board with keeping Wall Street’s gargantuan banks from crashing the economy. But the public has little ability to witness how the nation’s top bank supervisor performs this vital work. By law and custom, what goes on inside the New York Fed is a closely guarded secret.

Last year that changed when I took readers inside this cloistered institution and revealed something that only a select few have experienced. I obtained a remarkable set of secret recordings of examiners and their bosses on the job, recordings that financial writer Michael Lewis dubbed “the Ray Rice video for the financial sector.

The story was called “Inside the New York Fed: Secret Recordings and a Culture Clash.

The recordings came from a former bank examiner, Carmen Segarra, who was fired after she refused to water down a critical finding about Goldman Sachs.

Read “So Who is Carmen Segarra? A Fed Whistleblower Q&A” by Jake Bernstein.

Here are links for the full series: “Fed Tapes – The Secret Recordings of Carmen Segarra

Her recordings were also prominently featured in a collaboration I did with the radio aces at This American Life for a program called “The Secret Recordings of Carmen Segarra.”

Building off the recordings, extensive interviews and a trove of confidential documents, I followed the first Segarra story with two others about the New York Fed. “Secret Tapes Hint at Turmoil in New York Fed Team Monitoring JPMorgan” detailed how the Fed’s dysfunctional culture compromised its ability to respond to the costly “London Whale” trades and led to a revolt by on-site examiners. “High-Level Fed Committee Overruled Carmen Segarra’s Finding on Goldman,” dove more deeply into how a secretive group of top Fed executives had reversed Segarra’s finding that Goldman lacked a firm-wide policy to manage conflicts of interest, despite ample evidence to the contrary.