By Matthew R. Lee
SOUTH BRONX, March 28 -- When the Obama administration in December nominated Jay Powell formerly of Deutsche Bank to fill Kevin Warsh's seat on the Federal Reserve Board, Inner City Press called it putting a fox in charge of a hen house. Now on the eve of the Senate Finance Committee's hearing on Powell, the conflict of interest has gotten worse.
Deutsche Bank, Powell's former employer, recently moved to decertify at the Federal Reserve in order to evade the capital and other requirements of Dodd-Frank. Pressed on the matter on Capitol Hill last week, another Fed Governor Daniel Tarullo said he and the Fed would be looking into this.
But why put a former Deutsche Bank official on the Federal Reserve Board at this time? Would Powell recuse himself? He should be asked that by the Senate Finance Committee. But will he be?
Meanwhile Kevin Warsh who left the Federal Reserve Board in April appeared last night spinning on the Charlie Rose show. Click here to view.
Inner City Press through a Freedom of Information Act request showed that Warsh before leaving the Fed traveled to Beijing and engaged in "ex parte" communications with the Chinese government about ICBC's protested application to acquire Bank of East Asia. This is what the "designated Wall Street representative" on the Fed Board is supposed to do?
Nothing was said about Warsh's current employment. Conflicts of interest of former and prospective Federal Reserve Board governors are wildly under-covered, even in this time of Occupy Wall Street. This should end - watch this site.
