By: Dr. J. P. Hubert
Disgraced former New York governor Elliot Spitzer said today on CNBC that the Federal Reserve Board is controlled by CEO's of the major investment banks. While not engaging in patently illegal acts the Fed--according to Spitzer--allowed excessive leveraging and poor oversight regulation due to the fact that the Federal Reserve Board members had an obvious conflict of interest. Spitzer alleges that regulators should have insisted investment banks exercise better judgment e.g. objecting to leverage levels of 30:1. Spitzer stated that excessive CEO compensation and bonus packages are also symptomatic of the incestuous problem at the Fed.
