The dawn of the big data era will uncover some truths
A Chicago Booth School of Business study published last week showed that Federal Reserve workers were eager to inform Wall Street about what the Fed was planning to do.
PhD candidate David Andrew Finer gained access to a database of 500 million New York City taxi rides dating back to 2009 and found "highly statistically significant evidence of increases in opportunities for information flow" between the Federal Reserve Bank of New York and major commercial banks around Federal Open Market Committee meetings.
"These inferred meetings might pertain to monetary policy or could be social in nature," said Finer. "The data don't tell us. What we do know is that every interaction entails the risk that an outside party might gain valuable insights into the Fed."
The great thing about big data is it shows systemic problems and opportunities. So while misconduct may get all the headlines, those who exploit the opportunities will get all the rewards.
