Fed Inspector General: "We Discovered Issues That Warrant Immediate Attention"
By Tyler Durden
The Fed’s troubling, recurring and perhaps criminal data “leakage” problem has been thoroughly documented over the past years: from Tim Geithner telling bank CEOs what the Fed will do will in advance of it becoming before, to early leaks of Fed Minutes, to breached embargoes, to the release of material non-public information to consultants such as Medley (which the FBI has been supposedly probing for the past year, and which cost Pedra da Costa his WSJ job), to the Fed’s cozy relationship with the WSJ’s Hilsenrath over the years, by now everyone knows that when it comes to giving advance looks of critical information to various preferred parties, the Fed has had no qualms.
It appears that finally changed a week ago, when the Fed’s Inspector General already having had put his foot down on assuring there would be no more future leaks, got infuriated when the WSJ again managed to leak the story about the Fed failing various bank’s “living wills” before it was released. As a Reuters reported, “the Federal Reserve and Federal Deposit Insurance Corporation are investigating how the Wall Street Journal came to report that the two agencies were giving failing grades to some U.S. banks’ “living wills” the day before the regulators officially announced their determinations.
A Fed spokesman, Eric Kollig, confirmed on Wednesday that the U.S. central bank has asked its inspector general, its internal watchdog, to check how the news outlet was able to report on Tuesday that at least half of the eight biggest U.S. banks, including J.P. Morgan Chase would receive “harsh verdicts” on their plans for handling a potential bankruptcy without a federal bailout.
The FDIC’s chairman on Tuesday night asked the agency’s acting inspector general, Fred Gibson, to investigate the leak to the Journal of the results of the living will determinations, spokeswoman Barbara Hagenbaugh said.
The Journal’s story hit Twitter and its home page hours before the regulators officially posted their determinations early on Wednesday morning and as financial markets prepared for banks to release their quarterly earnings.
In short: the Fed’s deepthroat struck again, using his or her preferred outlet, the Wall Street Journal.
So now what? Well, earlier today the Office of the Fed Inspector General finally admitted that there is a problem when in a scathing report titled “The Board Should Strengthen Controls to Safeguard Embargoed Sensitive Economic Information Provided to News Organizations” in which it confirmed that as per its audit, “we discovered issues that warranted the Board’s immediate attention. We issued a restricted early alert memorandum to the Board on July 16, 2015, that outlined these concerns and included recommendations.“
And yet the leaks continue. Furthermore, if so much trivial information is consistently leaked to the press and paid subscription services, one can only imagine what happens behind closed doors between (bribed?) Fed staffers and commercial bankers, who as even Bernanke’s former advisor admitted, are the ones who truly own the Fed.
Here is the release:
The Board Should Strengthen Controls …read more
Source: Fed Inspector General: "We Discovered Issues That Warrant Immediate Attention"
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