Sen. Bernie Sanders, I-Vt., is planning to reintroduce legislation that would prohibit financial industry executives from sitting on the boards of directors of the 12 regional Federal Reserve Banks.
‘Jamie Dimon was the poster child for why we need to end the serious conflicts of interest at the Fed, but he was not alone,’ says Sanders, referring to the JPMorgan Chase CEO's now-expired terms as a director of the Federal Reserve Bank of New York. ‘Two-thirds of the directors at the New York Fed are hand-picked by the same bankers that the Fed is in charge of regulating. Allowing Wall Street CEOs to serve as Federal Reserve directors and hand-pick its members and staff is a clear example of the fox guarding the henhouse.’
Sanders adds that under current law, Dimon and other Wall Street CEOs ‘will be in charge of electing a new banker to serve as a director on the New York Fed,’ which he says creates a conflict of interest.
‘The CEOs of the largest banks in America should not be allowed to serve as directors of the main agency in this country in charge of regulating these financial institutions,’ Sanders adds. ‘The Fed has got to become a more democratic institution that is responsive to the needs of the middle class, not just Wall Street CEOs.’