New York Fed chairman Friedman abruptly resigns

Stephen Friedman, chairman of the board at the Federal Reserve bank of New York, abruptly resigned Thursday, days after The Wall Street Journal pointed out his approval of a request by Goldman Sachs was in violation of policy because of his considerable holdings in Goldman shares.
“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,”reported The New York Times.
“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 Times noted.
“While [the Fed] was weighing [Goldman's] request, Mr. Friedman bought 37,300 more Goldman shares in December. They’ve since risen $1.7 million in value,” reported The Wall Street Journal on May 4.
“Mr. Friedman also was overseeing the search for a new president of the New York Fed, an officer who has a critical role in setting monetary policy at the Federal Reserve. The choice was a former Goldman executive.”
“In a letter to Fed officials, Friedman said, ‘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 important work to do and does not need this distraction,’” reported USA Today.
Read a copy of Friedman’s resignation letter, below.