Ms. Gretchen Morgenson is a much heralded, business columnist for the New York Times. In her writing, she generally "tells it like it is" and doesn't suffer fools - or foolishness - very lightly.
Her Sunday column (Nov. 23, 2014) was about "regulatory capture"; a topic made infamous last week when the NCUA manufactured "that threat" as their excuse for using an old KBG playbook to run the Agency (Here are Chair Matz' video remarks at CUTimes - take a look for yourself).
Of course, Ms. Morgensen was writing about the Fed, not the NCUA. The New York Fed has come under sharp criticism for being too close to the major Wall Street banks - i.e., regulatory capture. Three short paragraphs 1) stated the core problem, 2) suggested a solution, and 3) outlined why the change was necessary.
1) CORE PROBLEM: "The Federal Reserve Board prefers to operate in a shroud of secrecy, and its officials really don't like having to answer to anybody."
2) SOLUTION: "Investors would benefit from greater disclosures by the Fed... The Fed, for example, reveals only final results of its "stress tests" that measure banks' health. If you required it to disclose those models, you would facilitate cross-bank comparisons ... You'd also create incentives for the banks to disclose more and more about their own models."
3) AND, WHY...: "There is another benefit to increasing transparency at the Fed. It would be a singularly powerful force against regulatory capture."
Think the NCUA will take this opportunity to be creative, lead the way, set a new standard of professional regulatory excellence....
