Dow Jones Newswire reporter Pedro da Costa has just taught other journalists a valuable lesson: never, ever attempt to make Federal Reserve Chair Janet Yellen appear foolish or vulnerable. If you do then, well, your career is in serious jeopardy.
This is what happened to da Costa during a Q&A session with the Fed Chair. He probed her on the leak of Fed policy discussions to one finance research head and the investigation surrounding the matter. It was all song and dance for Yellen as her face was in disbelief. But she had the last laugh, or at least those behind the scenes did.
Here is the exchange (it starts at 45:30):
Is Yellen more ruthless than her predecessor, Ben Bernanke? Perhaps. It seems the only ones that can ask the hard questions (if they do) are elected officials. It would be great to see Ron Paul engage with Yellen today.
The transcribed exchange can be read below:
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?
Janet 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.
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?
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.
Friends and colleagues: Tomorrow is my last day at The Wall Street Journal. Thank you for reading and stay tuned for my next adventures.
— Pedro da Costa (@pdacosta) July 30, 2015
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