New York Fed Chairman's Ties to Goldman Raise QuestionsWall Street Journal
The Federal Reserve Bank of New York shaped Washington's response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.
During that time, the New York Fed's chairman, Stephen Friedman, sat on Goldman's board and had a large holding in Goldman stock, which because of Goldman's new status as a bank holding company was a violation of Federal Reserve policy.
The New York Fed asked for a waiver, which, after about 2½ months, the Fed granted. While it was weighing the request, Mr. Friedman bought 37,300 more Goldman shares in December. They've since risen $1.7 million in value.
.... He left the White House in 2004 and later reinvested in Goldman shares, joining its board. He got involved in private-equity firm Stone Point Capital in Greenwich, Conn., where he is now chairman. In January 2008, he became a member of the New York Fed board and its chairman. In that role, he worked closely with Mr. Geithner. ...
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