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Federal Reserve 'Embeds' Employees in Banks

Daily Bell caught this WSJ report: Memo to employees at big Wall Street banks and securities firms: Be careful what you say on the elevator. You might be surrounded by regulators. As part of a push to prevent another financial crisis, the Federal Reserve Bank of New York and the Office of the Comptroller of the Currency are increasing the number of examiners who go to work every day at the companies they regulate. Much like reporters assigned to a military unit during war, these regulatory "embeds" get unprecedented access to financial firms such as Bank of America Corp.,Goldman Sachs Group Inc. and Morgan Stanley. Can you imagine a government employee embedded in your business? And as far as the comparison with military embeds, this is completely wrong. The military embeds journalists to keep an eye on them so that they don't wander off on their own. Banker embeds are embedded by the government and can go and do whatever they please. More from WSJ: The Fed's latest how-to "Commercial Bank Examination Manual" is 1,808 pages long, and examiners have the power to "review all books and records maintained by a financial institution." In addition to policing the rules, Fed examiners should "identify vulnerabilities early enough to head off major problems," says Daniel Tarullo, a Federal Reserve governor ...

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