GAO to Federal Reserve: Stop the Crony Capitalism

The Government Accountability Office issued a missive Wednesday to the Federal Reserve to improve its governance procedures in respect to banks (NYSE:KBE) — particularly those that are ‘director-affiliated’.

The Fed has been criticized for the number of director-affiliated banks that found a place in the government’s emergency lending programs during the financial crisis. According to Sen. Bernie Sanders, Vermont Independent, “the most powerful entity in the United States is riddled with conflicts of interest.”

The GAO suggested that the Fed broaden pool candidates for directors, document their roles, streamline procedures for granting of rule waivers, and make governance documents public.

The Fed has confirmed it would take steps for compliance.