Bank examiner Carmen Segarra’s 46 hours of secret recordings of meetings between Goldman Sachs and the Federal Reserve Bank of New York are being called “the Ray Rice video for the financial sector”—and by no less than financial journalist and Liar’s Poker author, Michael Lewis. Segarra’s recordings, released this morning by ProPublica and This American Life (TAL), go some ways towards explaining how regulators overlooked events leading up to the 2008 financial disaster. The subprime mortgage crisis, according to one 2008 report, was responsible for the greatest loss of wealth among people of color in modern U.S. history.
Segarra, who is Puerto Rican, was among a new group of staffers hired by the Fed in 2011* to better regulate the banks. Her assignment: Goldman Sachs. Says Lewis of listening to the story unfold on TAL:
1. You sort of knew that the regulators were more or less controlled by the banks. Now you know.
2. The only reason you know is that one woman, Carmen Segarra, has been brave enough to fight the system. She has paid a great price to inform us all of the obvious. She has lost her job, undermined her career, and will no doubt also endure a lifetime of lawsuits and slander.
So what are you going to do about it?
* Post incorrectly stated, 2012.