Did the NY Fed Leave a Funny Taste in YOUR Mouth Too?
Courtesy of Jr. Deputy Accountant
A "travesty" LOL.
Federal Reserve Bank directors say a Senate plan to kick bankers off the boards of regional Fed banks is an overreaction to one headline-grabbing incident and could harm the U.S. central bank.
Federal Reserve insiders worry that planned changes to the century-old U.S. central banking system — comprising 12 regional banks and a 7-member Washington-based Board of Governors — would make it more centralized, less independent, and less effective.
A provision in a wide-ranging regulatory reform bill near completion in Washington would ban bankers from serving on the boards of their regulators.
Alarm about possible conflict of interest at the Fed broke out after Goldman Sachs converted to a Fed-regulated bank to withstand the financial crisis.
This put then-New York Fed chairman Stephen Friedman — a Goldman director and former chairman — in violation of the Fed’s rules. Friedman requested a waiver for owning Goldman shares in 2008 and as he waited for the waiver, he bought more shares.
While his actions were not illegal, Friedman stepped down following public furor.
"This legislation, the way it’s proposed, is an overreaction to a particular unique situation, and to have bankers removed from these boards is a travesty," said Mark Hewitt, chief executive of Clear Lake Bank and Trust Co in Iowa and a director at the Federal Reserve Bank of Chicago.
The situation "maybe left a funny taste in someone’s mouth, but that’s not what’s happening in Chicago," he said.
So it isn’t a conflict of interest for Jamie Dimon to sit on the board of his bank’s regulator? Oh please, you’re totally overreacting, who else has their finger on the pulse of banking? Surely not the Fed themselves (as if that’s their job).
