Under pressure to show that it is up to the task of regulating giant Wall Street firms, the Federal Reserve issued a surprise announcement yesterday that it would review crucial aspects of its bank supervision, the New York Times reported today. The Fed asked its inspector general to look into whether top supervisors were getting the information they needed to make their decisions. The Fed also said that it wanted the inspector general to determine if top officials were hearing all the opinions of Fed bank examiners. The Senate is holding a hearing today to discuss whether bank regulators are too close to the firms they regulate. Right now, such concerns focus on the Federal Reserve Bank of New York, Wall Street’s main regulator. The Senate Banking Committee’s financial institutions subcommittee will question William C. Dudley, the president of the New York Fed.
