Friedman Resigns as NY Fed Chairman, Had Been Buying Goldman Stock in 2008-9

It just keeps getting more blatant and more brazen.

"And, 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."

Let’s see, it is perfectly all right for a Fed Chairman to buy shares in one of the banks he is ‘regulating’ especially when he is helping to make critical policy decisions directly involving them.

Who writes the Fed’s conflicts of interest policy, Alberto Gonzalez?

Yes the Fed would certainly make a very good systemic regulator…

Federal Reserve Bank of New York
Stephen Friedman Resigns as Chairman of the New York Fed’s Board of Directors
May 7, 2009

NEW YORK—The Federal Reserve Bank of New York announced today that Stephen Friedman, chairman of the board of directors of the New York Fed, has informed William C. Dudley, president and chief executive officer of the New York Fed, and the Board of Governors of his decision to resign effective immediately. Consistent with the Federal Reserve Act, Denis M. Hughes, deputy chair of the board, will exercise the powers and duties of the chair.

“My colleagues and I appreciate Steve’s vital service to the Bank during this time of great economic stress,” said Mr. Hughes. “We value his contributions"…

During the committee’s often intense deliberations over the next two months, I was privileged to observe closely Steve’s dedication, professionalism and work ethic. He was extraordinary. And, 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. I enjoyed working with Steve, and will miss his contributions in the boardroom.”

[Full article here.  Letter of resignation:]
 

New York, NY 10022
May 7, 2009
Mr. Wiliam C. Dudley
President
Federal Reserve Bank of New York
33 Libert Street
New York, NY 10045

Dear Bill:

By copy of this letter to Chairman Bernanke, I hereby resign as a Class C Director and Chairman of the Board of the Federal Reserve Bank of New York, effective immediately. Last Fall, after Goldman Sachs Group, Inc. became a bank holding company, I agreed to remain on the Board, pursuant to the waiver authority of the Board of Governors of the Federal Reserve System, to provide continuity durng a time of financial market instability. Today, although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being mischaracterized as improper. The Federal Reserve System has importnt work to do and does not need this distraction.

Please convey my appreciation and respect to my fellow Directors and the Reserve Bank staff for their cooperation and their service. It has been a pleasure to work with you, your predecessor, and our distinguished Board, as well as the dedicated, hard-working men and women of the New York Fed. The New York Fed plays an extraordinary and vital role in restoring stability to the financial system durng this very critical period, and it has been an honor to be part of the institution’s effort. I also am grateful to Chairman Bernanke and the other Members and staff of the Board of Governors for their advice and support in connection with the search for a new Chief Executive Officer for the New York Fed.

Stephen Friedman

cc: The Honorable Ben S. Bernanke
Chairman
Federal Reserve Board of Govemors
Federal Reserve System
Washington, DC 20551