Do More With Reuters
Partner Services

INTERVIEW - Geithner:time to review U.S. central bank governance

Sat May 9, 2009 5:18am IST
 
Email | Print | | Single Page
[-] Text [+]

By Glenn Somerville

WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner said on Friday it was time to review how regional Federal Reserve banks are governed to ensure the public feels confident no conflicts of interest are at play.

Geithner was asked during a Reuters Television interview about the resignation on Thursday of Stephen Friedman, a member of Goldman Sachs Group Inc's Board of Directors and a former chief at the firm, from his post as chairman of the New York Federal Reserve Bank's board. The resignation came after questions were raised about Friedman's purchases of Goldman Sachs stock.

In the interview, Geithner, who was president of the New York Fed until his approval for the Treasury post in January, called Friedman "an enormously dedicated, talented leader of the financial community." Still, Geithner said he and Fed Chairman Ben Bernanke felt it was time to take a look at how the central bank handles potential conflicts of interest.

Friedman, who had led the New York Fed's board since January 2008, bought shares in Goldman in December and again this past January. During that period, the U.S. Treasury and the Fed were drafting plans to bolster the capital held by the nation's big banks.

In his resignation letter, Friedman said he had complied with rules governing such purchases, but did not want to become a distraction while the Fed was fighting a recession. He repeated on Friday that he did not break any rules.

"I followed the rules as I always have," Friedman said during the Goldman annual shareholder meeting.

The U.S. central bank is comprised of a seven-member Board of Governors in Washington and 12 regional Fed banks.

Some regional directors are appointed by the Washington board and are not allowed to hold shares in bank holding companies, a restriction that applied to Friedman.  Continued...

India Investment Summit 2009
India Investment Summit 2009

Top executives and bankers discuss their own plans and the broader opportunities and challenges for India during the Reuters India Investment Summit in Mumbai and Bangalore.  Full Coverage | Blog 

Hugh Hefner
PLAYBOY SALE
An icon bows to changing times

With his Playboy Enterprises in talks to be sold for about $300 million, the 83 year-old Hugh Hefner will be giving up control over the iconic adult entertainment empire he founded that was instrumental in shaping society's opinions on nudity, sex and free speech.  Full Article 

Photo
A man walks past a bronze statue of a bull outside the Bombay Stock Exchange (BSE) building in Mumbai in this March 25, 2008 file photo. REUTERS/Punit Paranjpe/Files
Bubble trouble?

With India's benchmark stock index, the BSE Sensex, at around 17,000 points, are the Indian equity markets looking at a possible bubble?  Commentary 

Market Update

  • IndiaIndia
  • USUS
  • UKUK
  • Asia
  • Most Actives

SPECIAL REPORT

Himangshu Watts
India's food dilemma

Indian farms are failing to attract capital or talent, either from rich landlords or the students who graduate from agricultural universities.  Full Article | Related Story 

showcase

U.S. Recession
U.S. Recession

A trip through the epicenters of the American recession.  Full Coverage 

 
Central Banks Cautious
Central Banks Cautious

Reuters tracks the policies of the world's top central banks as the debate over global economic recovery rages on.   Full Coverage 

 
T P Raman
Column - RBI leads the world

Reserve Bank of India's approach ring-fenced the banking system.   Full Article 

 
Funding Blues
Funding Blues

A popular tactic used by Indian brokerages to raise money for rich clients is likely to be banned.  Full Article 

 
Not Enough Jobs
Not Enough Jobs

Venture capital creates jobs, but not enough.  Full Article 

 
Column - A Sweet Dream
Column - A Sweet Dream

There are good reasons for Ferrero to consider a combination with Cadbury.  Full Article