Notice that Goldman Sachs came first for this guy before the government job..

"Naked Conflicts": NY Fed Chairman Resigns Over Goldman Controversy Posted May 08, 2009 02:19pm EDT by Tech Ticker in Investing, Recession, Banking Related: gs, xlf, spy, dia, jpm, fas, SKF

New York Fed Board Chairman Stephen Friedman resigned yesterday amid controversy he owned stock and served as a board director of Goldman Sachs -- an entity he was served with overseeing as a Fed regulator.

From Friedman's resignation letter: "…although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being mischaracterized as improper." It was improper says our guest, William Black, associate professor of Economics and Law University of Missouri, Kansas City. Bottom line: It's a clear conflict of interest for private banks to own an arm of the Fed, much less individual regulators to own stakes in entities they're overseeing.

Friedman’s case has highlighted the unusual role of Fed’s 12 regional banks that serve both private and public interests. The solution?

• For starters, Black says we need to create career incentives for the best financial minds to pursue long-term public-service careers and get off the Wall Street-Washington corridor, gravy train. But what about the argument we need the best minds working for the Fed? Black simply points to the past three years: "Smart people destroyed the economy," he says.
• Second, we need to raise the bar for conflicts of interest, says Black, who was counsel to the Federal Home Loan Bank Board during the S&L crisis. At the time Black notes he couldn't get a home loan without the third degree – let alone millions in corporate stock of a company he was charged with regulating.