Fed secrecy gives cashed-out insiders an advantage

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Politics,Beltway Confidential,Timothy P. Carney

Concern about bank-bailout cronyism is a great opportunity for Left-Right unity against the corporatist middle, and today the liberal Huffington Post and MSNBC’s Dylan Ratigan produced a good story on the Federal Reserve.

Ratigan and HuffPo requested minutes from the Federal Reserve’s meetings form 2007-2010. They got back heavily redacted versions. Both Ratigan and HuffPo’s Ryan Grim and Ariel Edward-Levy noted:

There are some market participants, however, who know exactly what happened in those meetings.

One of the few things not redacted in the Fed's FOIA response is the list of officials who attended each confidential meeting. Many of those people have since left the central bank and gone to work in the financial industry, taking with them privileged information about the Fed's thinking that is still closed to the public.

Take Susan Bies. A onetime member of the Fed Board of Governors, she was involved with the Financial Stability Forum, an international group of central bankers, finance ministers and the like, and, according to Forbes, "led the Fed's efforts to modernize the Basel capital accord." Bies now sits on Bank of America's board.

Brian Sack has cycled between the Fed and the private sector more than once. In 2009, he returned to manage the System Open Market Account. Bernanke said at the time, "Many of you know Brian, I am sure. He was here. He went off to work with Larry Meyer for awhile. Now we welcome him back to the Fed family."

I’ve written about two Fed bailout barons, Nathan Sheets and Brian Madigan, going to work for banks

Here’s a fuller list from Ratigan’s website:

- Deborah Bailey (Deputy Director, Div of Banking Supervision and Regulation) - Deloitte

- Meredith Beechey (Economist, Div of Monetary Affairs) - Sveriges Riksbank

- Susan Bies (Committee member) - Bank of America

- Paul M. Connolly (First VP, Boston Fed) - Eastern Bank/John Hancock Life Insurance Company

- J. Benson Durham (Assistant Director, Division of Monetary Affairs) - The Capital Group Companies

- Michael Gapen (Economist, Div. of Monetary Affairs) - Barclays Capital

- Jon Greenlee (Associate Director, Div of Banking Supervision and Regulation) - KPMG

- Randall Kroszner (Committee member) - Patomak Global Partners/University of Chicago

- Brian Madigan (Secretary and Economist; Associate Economist) - Barclays

- Laurence Meyer (Visiting Reserve Bank Officer, Div of Monetary Affairs) - Macroeconomic Advisers LLC

- Cathy Minehan (Committee member) - Arlington Advisory Partners, Simmons College School of Management

- Roberto Perli (Dep. Assoc. Dir., Div. of Monetary Affairs; Assistant Director, Div of Monetary Affairs) -  International Strategy & Investment

- Brian Peters (Senior VP, New York Fed) - AIG

- Nathan Sheets (Economist) - Citi

- David Stockton (Economist) - Macroeconomic Advisers LLC

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