Let industry regulate itself

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More on the Goldman/ Fed regulation story:

One of the most troubling aspects of the financial crisis was that government regulators let it happen in the first place. And the most compelling explanation is also the most disturbing: regulators were unduly influenced or even controlled ("captured" is the term of art) by the very banks and financial firms they were meant to rein in. This argument, popularized most notably by MIT economist Simon Johnson, has strong circumstantial evidence supporting it, but concrete proof from within regulatory agencies has, understandably, been hard to come by. On Friday, This American Life and ProPublica announced they had found such proof. A joint report produced by ProPublica reporter Jake Bernstein (who previously won a Pulitzer for his investigative reporting on Wall Street for the two outlets) revealed the existence of 46 hours of audio recordings made inside the Federal Reserve Bank of New York, which, as the Fed's interface with the financial sector, serves as one of country's most powerful bank regulators. Taken by former Fed bank examiner Carmen Segarra, the recordings suggest a culture within the Fed that was at best overly cautious in confronting bank wrongdoing, and at worst in bed with the banks it was regulating.

Whistleblower’s tapes suggest the Fed was protecting Goldman Sachs from the inside - Vox