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New York Fed chief quits over bank links
08.05.09
Stephen Friedman, chairman of the New York Federal Reserve's board of directors, quit today over his links with Wall Street giant Goldman Sachs.
Friedman, a retired chairman of Goldman and shareholder in the firm, had been head of the New York Fed's board since January 2008.
Fed bank directors are not allowed to own shares of bank holding companies, a status Goldman unexpectedly gained in September when it gave up its investment-bank status to combat the financial crisis.
He obtained a waiver regarding his Goldman shares until the end of this year but it has since emerged he bought more stock in December 2008 and January 2009.
"Although I have been in compliance with the rules, my continuation on the Reserve Bank Board is being mischaracterised as improper," Friedman told New York Fed president William Dudley.
Thomas Baxter, executive vice president of the New York Fed, said: "With respect to Steve's purchases of Goldman shares in December of 2008 and January of 2009, these purchases did not violate any Federal Reserve statute, rule or policy."
