Elizabeth Warren Calls For Probe Into The Federal Reserve Bank of New York

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Elizabeth Warren, United States senator from Massachusetts, has called for an investigation into the relationships the Federal Reserve Bank of New York has with the financial institutions it regulates. Whistler-blower Carmen Segarra gave secret tapes to "This American Life". The program published them, and they seemed to suggested that the Fed has been far too deferential in its regulatory duties.

"Congress must hold oversight hearings on the disturbing issues raised by today's whistle-blower report when it returns in November -- because it's our job to make sure our financial regulators are doing their jobs," Warren said according to Bloomberg.

Sherrod Brown, her fellow Democrat on the Senate Banking Committee, has come to Warren's side. He called for "a full and thorough investigation", according to CNN.

What does the Fed have to say for itself? The institution has released a statement to "This American Life":

"The New York Fed categorically rejects the allegations being made about the integrity of its supervision of financial institutions. The New York Fed works diligently to execute its supervisory authority in a manner that is most effective in promoting the safety and soundness of the financial institutions it is charged with supervising. To accomplish this important task, the New York Fed employs and trains a large workforce of examiners and specialists and works with the Board of Governors, which sets supervisory policy, and other experts throughout the Federal Reserve System."

Segarra is holding her ground in the matter. "The audio on the tapes speaks for itself. Regardless of whether our case proceeds on appeal, we are gratified that Carmen is vindicated by the recorded words of employees of Goldman Sachs and the New York Fed," she said according to Reuters.