The Fed Cracks Down on Conflicts of Interest? Sure, I Buy That
Stephen Friedman's only crime was getting the NY Fed caught for this.
The Federal Reserve unveiled new restrictions on directors of its regional banks Wednesday, responding to a controversy that spurred the resignation of Goldman Sachs director Stephen Friedman as chairman of the New York Fed's board earlier this year.
The new policy gives directors -- except those who are, by law, required to be bankers -- 60 days either to resign from a regional Fed board if a company with which they are affiliated becomes a Fed-regulated firm or to sever ties with that financial institution.
Mr. Friedman, a former chief executive of Goldman Sachs, came into conflict with the Fed's rules in September 2008 during the heat of the financial crisis when Goldman Sachs became a Fed-regulated bank holding company. The Fed granted Mr. Friedman a waiver from rules that would have prevented him from holding any Goldman shares and serving as a Goldman director. Without getting Fed consent, Mr. Friedman bought more Goldman shares in December, before the waiver was granted, and in January, after it was granted, The Wall Street Journal reported earlier this year.
Mr. Friedman resigned from the New York Fed's board in May. The Fed's announcement Wednesday appeared to be a tacit acknowledgement that it should have required Mr. Friedman to resign, recuse himself or sell his shares.
I am sure this new rule will be just effective as the last rule which said pretty much the same thing and from which Friedman was pardoned with just a little ethics waiver. An ethics waiver is a hilarious concept, and perhaps should be required paperwork for new Fed officers, directors, and regulators right after signing the employee handbook and filling out a W-4.
Or fuck it, let's just make it so they can own whatever they regulate. It'll be like legalizing marijuana, it will eliminate having to put white collar crooks in overcrowded prisons and will take the stigma out of conflicts of interest so guys like Friedman can live their lives in peace.
Sound like a plan? See you fuckers at the bottom.