Fed and Bowman Sued Over Secret Meetings with Bank CEOs
A financial advocacy group called Better Markets has filed a lawsuit against the Federal Reserve and its vice chair, Michelle Bowman. The lawsuit alleges that secret meetings between Bowman and bank CEOs compromised the rulemaking process for capital requirements.
The group claims that Bowman met with JPMorgan Chase CEO Jamie Dimon, Goldman Sachs CEO David Solomon, and others during the comment period for a proposed overhaul of capital requirements. Under the proposal, the nation's largest banks would have to hold 1.4% more in common equity tier 1 capital than they do now, but the overall requirement would drop 4.8%.
Dimon blasted parts of the proposal as 'frankly nonsensical' in his April letter to shareholders, and JPMorgan's CFO Jeremy Barnum called the G-SIB surcharge 'miscalibrated.'
Better Markets alleges that Bowman directed banks on what to say and leave unsaid in public comments, manipulating the process to achieve a predetermined result. The group argues that this was not regulation or supervision, but corruption.