US senator calls for hearings on Fed's alleged deference to Goldman Sachs

US senator Elizabeth Warren has called for congressional hearings into allegations that the Federal Reserve Bank of New York had been too deferential to the firms it regulates, Bloomberg reported.

A radio programme about the regional Fed bank raised ''disturbing issues'' and ''it's our job to make sure our financial regulators are doing their jobs,'' Warren, a Massachusetts Democrat and member of the Senate Banking Committee, said in a statement yesterday.

The programme, ''This American Life'', released the transcript of a broadcast that included excerpts of conversations, which it claimed were secretly recorded by Carmen Segarra, a former New York Fed bank examiner who was fired in 2012, with some of her colleagues and her supervisor.

In the transcript, the former bank examiner described how she felt that her Fed colleagues were afraid of Goldman Sachs Group.

She said, it appeared there was a level of deference to the banks.

The New York Fed has rejected Segarra's allegations outright.

''The New York Fed works diligently to execute its supervisory authority in a manner that is most effective in promoting the safety and soundness of the financial institutions it is charged with supervising,'' it said in a statement posted on its website.

Warren's call for a probe received support from senator Sherrod Brown, an Ohio Democrat who was also on the banking committee.

Segarra said she recorded 48 hours of audio from her time at the regulator, CNN Money reported.

She asserted that the tapes revealed how her bosses at the New York Fed repeatedly rejected her calls for tougher regulations on Goldman Sachs.

Segarra who is currently suing her former employer over her dismissal, believes she was fired for trying to blow the whistle.

In one well-publicised case, Goldman's $21-billion acquisition of pipeline company El Paso by Kinder Morgan came under fire. Goldman was advising El Paso on the deal even though it owned 20 per cent of Kinder at the time, which later led to shareholder lawsuits.

According to Segarra, Goldman lacked a firm-wide conflicts of interest policy. She and her legal team started working on a formal finding on Goldman that would have forced the bank to adopt a policy suitable to the Fed, the report asserted.

However, her superiors insisted Goldman had a conflict of interest policy, albeit a weak one, in an attempt to shield the company.

"Carmen, I don't understand why the fixation on whether they do or don't have a policy," said Mike Silva in the audio recording posted online. "They have one, we can say its a miserable one."