“The Federal Reserve was aware of risky practices at JPMorgan Chase as early as 2008 but failed to follow up for more than three years until those risks had snowballed into the company’s $6.2 billion London Whale scandal, according to a new report from the central bank’s Office of Inspector General.
“Financial reform advocates’ response to this unhappy but perhaps not surprising news was summed by Dennis Kelleher, president and CEO of Better Markets.
“The remarkable thing here is that the Fed’s own people identified the high-risk activities at JPMorgan Chase’s offshore units and alerted their supervisors and others that a comprehensive systematic review of those activities should be undertaken quickly,” Kelleher said. “And then they didn’t. They just didn’t do it.”
“But the implications of the IG report reach well beyond the Whale debacle, highlighting how much power the Fed’s New York branch wields and how little influence the public interest has within that branch.”
Read the full Huffington Post article by Zach Carter here.