Over the last several weeks on this blog, I have expressed a broad set of concerns about governance arrangements at the Federal Reserve Bank of New York. I have made the specific case
for Jamie Dimon, the chief executive of JPMorgan Chase, to step down
from the New York Fed’s board because of the large, unexpected losses in
his bank’s London proprietary trading operation — and the fact that
these activities and their disclosure are now under investigation by the
Fed.
On Monday I met with senior staff members of the Federal Reserve System to deliver and discuss a petition I created, signed by 38,000 people, requesting that Mr. Dimon resign or be removed from the New York Fed board. The staff members were gracious in the time they afforded me.
In addition, as a result of recent interactions with former officials and others who know the Fed intimately, I have three substantive governance concerns for the New York Fed that merit further discussion. Let me pose them as straightforward questions that I hope the Fed, at the Board of Governors or New York Fed level, will answer publicly soon.
First and most important, why didn’t Mr. Dimon step down from the board of the New York Fed in March 2008, when JPMorgan Chase bought Bear Stearns with financial support provided, in part, by the Fed?
This transaction fundamentally transformed the relationship of Mr. Dimon and the New York Fed. It is awkward for any director to enter into a significant commercial transaction with an organization that he or she is charged with overseeing.
This was a significant transaction for Mr. Dimon, representing a big expansion of his business. It was also a significant transaction for the Federal Reserve, both as a measure to stabilize the economy and in terms of the specific provisions of the financing it provided.
Read more: http://economix.blogs.nytimes.com/2012/06/28/three-more-governance-questions-for-the-fed/?ref=business
On Monday I met with senior staff members of the Federal Reserve System to deliver and discuss a petition I created, signed by 38,000 people, requesting that Mr. Dimon resign or be removed from the New York Fed board. The staff members were gracious in the time they afforded me.
In addition, as a result of recent interactions with former officials and others who know the Fed intimately, I have three substantive governance concerns for the New York Fed that merit further discussion. Let me pose them as straightforward questions that I hope the Fed, at the Board of Governors or New York Fed level, will answer publicly soon.
First and most important, why didn’t Mr. Dimon step down from the board of the New York Fed in March 2008, when JPMorgan Chase bought Bear Stearns with financial support provided, in part, by the Fed?
This transaction fundamentally transformed the relationship of Mr. Dimon and the New York Fed. It is awkward for any director to enter into a significant commercial transaction with an organization that he or she is charged with overseeing.
This was a significant transaction for Mr. Dimon, representing a big expansion of his business. It was also a significant transaction for the Federal Reserve, both as a measure to stabilize the economy and in terms of the specific provisions of the financing it provided.
Read more: http://economix.blogs.nytimes.com/2012/06/28/three-more-governance-questions-for-the-fed/?ref=business
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