As if the mainstream press needed any further reinforcement, between the WSJ and the Federal Reserve the message is painfully clear: Don’t Rock The Boat! From Tyler Durden at zerohedge.com:
It was virtually inevitable.
As we reported on June 17, Pedro Da Costa, one of the more determined and controversial Fed reporters, was shocked to learn he was no longer welcome to ask Janet Yellen uncomfortable questions, questions related to the biggest scandal currently gripping the Fed: its leaks of proprietary information to “expert network” Medley Global (recently sold by Pearson to Japan’s Nikkei) and one which has since morphed into a criminal investigation.
As a reminder, this is the Q&A that got Pedro in hot water with Janet Yellen during the March press conference:
PEDRO DA COSTA. Pedro da Costa with Dow Jones Newswires. I guess I have two follow-ups, one with regard to Craig’s question. So, before the IG’s investigation, according to Republican Congressman Hensarling’s letter to your office, he says that, “It is my understanding that although the Federal Reserve’s General Counsel was initially involved in this investigation, the inquiry was dropped at the request of several members of the FOMC.” Now, that predates the IG. I want to know if you could tell us who are these members of the FOMC who struck down this investigation? And doesn’t not revealing these facts kind of go directly against the sort of transparency and accountability that you’re trying to bring to the central bank?
CHAIR YELLEN. That is an allegation that I don’t believe has any basis in fact. I’m not going to go into the details, but I don’t know where that piece of information could possibly have come from.
PEDRO DA COSTA. If I could follow up on his question. I think when you get asked about financial crimes and the public hears you talk about compliance, you get a sense that there’s not enough enforcement involved in these actions, and that it’s merely a case of kind of trying to achieve settlements after the fact. Is there a sense in the regulatory community that financial crimes need to be punished sort of more forcefully in order for them to be—for there to be an actual deterrent against unethical behavior?
CHAIR YELLEN. So, the—you’re talking about within banking organizations? So, the focus of regulators—the banking regulators—is safety and soundness, and what we want to see is changes made as rapidly as possible that will eliminate practices that are unsafe and unsound.
We can’t—only the Justice Department can bring criminal action, and they have taken up cases where they think that that’s appropriate. In some situations, when we are able to identify individuals who were responsible for misdeeds, we can put in place prohibitions that bar them from participating in banking, and we have done so and will continue to do so.
To continue reading: Pedro Da Costa Is Leaving The Wall Street Journal