The bank’s trading strategy, which intended to serve as a hedge against credit risk, was unscrupulously used by its traders to build risky positions, thereby raising doubts about the efficacy of the internal compliance process.
In addition, they provide an important opportunity for the President to try to influence monetary policy decisions by pressures exerted on the Chairman subsequent to appointment. To a lesser degree, appointment of governors and direct pressure on them are further avenues of political influence that have been employed, at least on occasion.