ARTICLE: New York Fed president criticized for ignoring flaws By Kevin Dugan

After blasting big banks for their rotten culture, New York Federal Reserve President William Dudley can no longer ignore the stench emanating from his own bank.

Dudley, 61, came under fire on Friday after secretly recorded audio tapes emerged that purportedly show how the New York Fed is far too cozy with the financial institutions it is supposed to oversee.

Dudley, a former Goldman Sachs partner who was tapped to lead the New York Fed in 2009, has called on big banks to overhaul their culture while turning a blind eye to his institution’s own flaws, critics say.

“He’s basically putting it on the banks to be more ethical,” one former top regulator told The Post.

“I would say, what about you? This is the pot calling the kettle black.”

Last year, Dudley said in a speech that some banks have an “apparent lack of respect for law, regulation and the public trust.”

He went so far as to suggest that Wall Street firms needed to clean house and that more than just a few bad actors were to blame for the excesses that led to the financial crisis.

“There is evidence of deep-seated cultural and ethical failures at many large financial institutions,” Dudley said.

Next month, the bank overseer will host a workshop on “reforming culture and behavior” on Wall Street that will attract bigwigs like Morgan Stanley CEO James Gorman and the Securities and Exchange Commission’s top enforcer, Andrew Ceresney.

Dudley’s tough talk on the banks stands in stark contrast to the audio recordings that surfaced on Friday.

The 46 hours of tapes were recorded by Carmen Segarra, a former New York Fed bank examiner who claims that her colleagues were afraid to push back against Goldman even on a deal they privately referred to as “shady.”

The Segarra tapes — which haven’t been released in full — amount to a WikiLeaks-type dump of information on powerful financial institutions and the financial regulators that are supposed to keep them in check.

The New York Fed — the most powerful of the regional Fed banks and the one with the most Wall Street contact — embeds its own examiners inside the institutions its regulates as opposed to bringing in outside lawyers to determine whether banks are playing by the rules.

Excerpts of the Segarra tapes, obtained by National Public Radio and ProPublica, paint a picture of deferential financial cops fretting about being too hard on banks and keeping embarrassing comments from Goldman execs out of meeting minutes.

Both the New York Fed and Goldman deny the allegations and claim that Segarra, who sued for wrongful termination, was fired for poor performance.

“The New York Fed categorically rejects the allegations being made about the integrity of its supervision of financial institutions,” it said in a statement. “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.”