- The Washington Times - Friday, May 8, 2009

Stephen Friedman, chairman of the Federal Reserve Bank of New York’s board of directors, has resigned effectively immediately, the bank announced Thursday.

Mr. Friedman was the subject of a recent Wall Street Journal story that raised questions about his ties to Goldman Sachs Group Inc.

“Although I’ve been in compliance with the rules, my public service … on the Reserve Bank Board is being mischaracterized as improper,” Mr. Friedman said in his resignation letter. “The Federal Reserve System has important work to do and does not need this distraction.”

Goldman Sachs late last year received quick Fed approval to become a bank holding company. During that time, Mr. Friedman sat on Goldman Sachs’ board and had a large holding in the company, a violation of Fed policy, the Journal reported.

But the New York Fed’s executive vice president and general counsel Thomas Baxter on Thursday said Mr. Friedman’s purchases of Goldman Sachs stock in December 2008 and January 2009 “did not violate any Federal Reserve statute, rule or policy.”

Mr. Friedman, a retired Goldman Sachs chairman, said he had received a waiver to remain on the company’s board after Goldman Sachs became a bank holding company.

Denis Hughes, deputy chair of the New York Fed’s board, will step in and “exercise the powers and the duties” of board chairman, the regional bank said.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide