Wednesday, May 6, 2009

What's with WSJ Going After the Regional Fed Banks?

The WSJ story yesterday going after New York Fed chairman Stephen Friedman could have been viewed as an oddity, an outlier. But WSJ is back again this morning with the regional Fed banks as the target:

The 12 regional Federal Reserve banks have conflicting practices regarding directors who are board members of banks and own shares of bank-holding companies, heightening calls to overhaul the policies at these financial institutions.

Corporate-governance practices at the regional Fed bank system faced criticism this week following a page-one article Monday in The Wall Street Journal detailing how Stephen Friedman, chairman of the Federal Reserve Bank of New York and a Goldman Sachs Group Inc. director, was granted a waiver that allowed him to hold Goldman shares even after Goldman became a Fed-regulated bank-holding company in September.
These kind of stories don't happen by accident. Have some of the regional Fed presidents gotten a bit too uppity and headquarters is planning some type of straight jacket for regional bank presidents? Smells like it to me.

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