The current administration, President Trump more specifically, is no stranger to violating previously held norms. One of these, writes Jordan Haedtler, was his criticism of the Federal Reserve’s policies–first on the campaign trail directed against Janet Yellen for keeping interest rates low, then a few weeks ago against current Chair Jay Powell for hiking interest rates.

This behavior is alarming, to be sure, but Haedtler argues in Washington Monthly that the greater threat to the Fed’s independence comes from Wall Street rather than the White House.

The Fed’s structural flaws have led to regulatory capture, which compromises its ability to set monetary and regulatory policy in a manner that isn’t tilted to favor those at the very top of the economic ladder. Trump may have broken a norm by commenting on monetary policy, but the Fed’s status quo is unaccountable, opaque decision-making shaped by deep conflicts of interest with the very financial institutions the Fed is ostensibly supposed to supervise.

For instance, David Cote abruptly resigned in March from the board of directors of the New York Fed, arguably the most important independent (at least formally) entity in the financial system. He left to pursue business opportunities with Goldman Sachs, that would “affect his eligibility to serve.”

Far from being a one-off instance of a “revolving door,” Haedtler outlines why the Federal Reserve System is structurally flawed, making it vulnerable to capture by the financial institutions it is tasked with regulating.

Each of the 12 Federal Reserve Banks has the responsibility of supervising the financial institutions within its district. Though commercial banks are regulated by the Fed, they’re also “shareholders” in these regional Reserve Banks, giving them the authority to elect six of the nine directors at each Reserve Bank—three Class A directors and three Class B directors. (Another three Class C directors are appointed by the Fed’s Board of Governors.) Together, the Class B and Class C directors elect the Reserve Bank president and then decide whether to reappoint them to a new term every five years. These directors are rife with conflicts of interest. Besides Cote—a Class B director who was once the CEO of technology and manufacturing giant Honeywell—JPMorgan Chase CEO Jamie Dimon served as a Class A director while the New York Fed was arranging the sale of Bear Stearns to Dimon’s bank. Though Dodd-Frank reformed the presidential selection process by removing the Class A directors from the presidential selection process, Wall Street still maintains a heavy hand in the process. When banks have a such a powerful role in picking some of their key regulators at the Fed, the very concept of “Fed independence” is inherently illusory.

There are also problems with the diversity (in terms of race, gender, but most importantly class) in the Fed’s leadership. This creates a tension between the Fed’s dual mandate to maximize employment (which requires inflation, something good for ordinary workers but bad for asset-holders) and maintain price stability (where the dynamic is reversed).

This is a troubling state of affairs. If the purpose of the Federal Reserve System is to create an entity insulated from political pressures, more work is needed to ensure the regulated inmates aren’t running the regulatory asylum.