U.S. Watchdog Getting Ready to probe Federal Reserve’s Lax Oversight of Wall Street’s Financial Institutions

U.S. Watchdog Getting Ready to probe Federal Reserve’s Lax Oversight of Wall Street’s Financial InstitutionsReportedly, a United States watchdog agency is planning to investigate if the U. S. Federal Reserve has been slack in supervising the banks which it is meant to monitor.

The issue cropped after a written request from Democratic lawmakers. This marks the most recent sign of distrust noted between Congress and the United State's central bank.

On October 8, the Government Accountability Office received a request from ranking representatives Maxine Waters of the House Financial Services Committee and Al Green of the Subcommittee on Oversight and Investigations, to launch a probe of "regulatory capture" focusing on the New York Fed.

On Friday, GAO spokesman Chuck Young said, the U. S. Government Accountability Office plans to keep the request and launch a review in response to the call from Reps. Maxine Waters, and Al Green, last fall.

Young said, "The request was made in October, but the work is in the initial phases". It involves the determination of the review's scope and methodology. The GAO is non-partisan and conducts reviews on behalf of Congress.

The New York Fed is the Federal Reserve's first line of supervision on the Wall Street financial institutions. The letter from Walters and Green raised concern and criticism that regular interactions with the bankers could have made the Fed officials too friendly as regulators, which could be a likely disadvantage for the U. S. public.