Quote:
Friedman Resigns as Chairman of New York Fed
Stephen Friedman, the chairman of the Federal Reserve Bank of New York, abruptly resigned on Thursday, days after questions arose about his ties to Goldman Sachs.
Mr. Friedman was chairman of the New York Fed at the same time he was a member of Goldman’s board. He also had a substantial stake in the firm as the Fed was crafting a solution to keep Wall Street banks afloat. Denis M. Hughes, deputy chair of the board, will take over as the interim chairman, the New York Fed said in a statement. (Read Mr. Friedman’s letter after the jump.)
Because the New York Fed approved a request by Goldman to become a bank holding company, the chairman’s involvement in Goldman was a violation of Fed policy, The Wall Street Journal said in an article earlier this week.
The New York Fed asked for a waiver, which, after about two and a half months, the Fed granted, the newspaper said. During that time, Mr. Friedman bought 37,300 more Goldman shares in December, which have since risen $1.7 million in value.
In his resignation letter, Mr. Friedman said his public service on the board was being characterized as “improper” despite his compliance with the rules. “The Federal Reserve System has important work to do and does not need this distraction,” he said.
“With respect to Steve’s purchases of Goldman shares in December of 2008 and January of 2009, which have been the object of some attention lately, it is my view that these purchases did not violate any Federal Reserve statute, rule or policy,” Thomas C. Baxter, the general counsel of the New York Fed, said in a statement. “I enjoyed working with Steve, and will miss his contributions in the boardroom.”
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so....Steve Friedman was on the board of directors of both the Federal Reserve and Goldman Sachs...
....while he helped craft the banker's boondoggle which handed gazillion's of dollars from the Federal Reserve to Wall Street Banks (wall street banks including Treas. Sec.'s former firm, Goldman Sachs)...
...but he probably hasn't broken any Federal Reserve rules.
Whew!!!! For a minute there i was a little concerned he might have broken a Federal Reserve rule. Thank goodness there is nothing shady or suspect about this.
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(what's really funny about this is that all attention is and will likely be over the purchase of 37k shares of stock by friedman, not the massive conflict of interest*** created by serving the Fed Res and Goldman Sachs)
***(it's only a conflict of interest if we pretend that the purpose of the Fed Res isn't to line the wallets of bankers....so really it isn't a conflict of interest)