Remember that whole nasty incident with former New York Fed Chairman Stephen Friedman? The Fed sure does. And it's taking steps to make sure no one on the boards of its 12 regional banks can have those annoying perceived conflicts of interest, because the public gets really pissed off when a bank you're bailing out happens to have a representative on the inside.
From now on, any B or C class director on any regional Fed board affiliated with any company that becomes affiliated with the Fed has to quit one job or the other within 60 days. During those 60 days, he or she still gets to draw a paycheck, but doesn't get to play with his or her fellow Fed directors during that time.
But that's not harsh enough: The Fed wants to make sure its public servants are sacrificing enough. So, if a Class C director--those picked by the Beard and Co.--so much as owns stock in a company that issues more stock during his or her terms, the director has to sell it all, or quit the Fed board.
So, who wants to join a regional Fed board? Anyone?
Fed Aims to Distance Directors From Private Banks [WSJ]