Chapter 8

The Central Bank

Abstract

Each Federal Reserve Bank has a nine-member board. Member banks elect six directors, three of them to represent the banks and three to represent the public, and the Board of Governors designates three. Member banks hold non-transferable stock and receive a capped cumulative dividend. GAO reported in 2011 that directors were affiliated with institutions that used the Fed's emergency programs and that bank representatives on the boards create an appearance of a conflict of interest. GAO found no evidence of systemic bias in the programs. The $16.1 trillion figure comes from a GAO table that adds every renewal of overnight loans. BlackRock was a New York Fed contractor under the Bush and Obama administrations, with at least $212.0 million in fees, and again from 24 March 2020 under the Trump administration. Republican senators and Democratic House members wrote to the Fed about that role in April 2020, in opposite directions. The Fed's inspector general reported on trading by five Fed officials, and the chief executive of Silicon Valley Bank sat on the San Francisco Fed's board while the Fed supervised the bank. The chapter states the Fed's own position beside each record.

8.1 The 1910 meeting and the 1913 Act

Finding POL-8.1Reported

In November 1910 six men met at the Jekyll Island Club in Georgia to write a plan to reform the banking system, and the meeting was kept secret until the 1930s. The Federal Reserve History essay states that the technical details of the 1913 Federal Reserve Act closely resembled the Aldrich plan and that the major differences were the political and decision-making structures.

The Federal Reserve History essay by Gary Richardson and Jessie Romero names the six attendees as Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip and Paul Warburg. It states that the meeting was kept secret until the 1930s.

Evidence: Exhibit 815

§8.1.1

The essay is the Federal Reserve's own account of the meeting. It says Benjamin Strong probably did not attend, although Vanderlip recalled him there.

§8.1.2

The essay says of the legislation: "The technical details of the final bill closely resembled those of the Aldrich Plan. The major differences were the political and decision-making structures." Congress passed the Act and the President signed it in December 1913. The essay relays the attendees' later recollections.

Exhibit 815 · Archive institutional history

The Meeting at Jekyll Island (Federal Reserve History essay by Gary Richardson and Jessie Romero)

In November 1910, six men—Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip and Paul Warburg —met at the Jekyll Island Club, off the coast of Georgia, to write a plan to reform the nation's banking system.

The Fed's own history names six attendees in November 1910: Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip and Paul Warburg. It says the meeting was kept secret until the 1930s, that it is unlikely Benjamin Strong attended although Vanderlip recalls him there, and that the technical details of the 1913 Federal Reserve Act closely resembled the Aldrich plan, with the major differences in political and decision-making structures. Congress passed the Act and the President signed it in December 1913.

Source: Federal Reserve Bank of Richmond for the Federal Reserve Board (Federal Reserve History)
Date: Essay (events 20-30 November 1910)
Quoted from: Opening paragraph
Grade: Reported
Document: https://www.federalreservehistory.org/essays/jekyll-island-conference
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.2 Directors and stock

Finding POL-8.2Primary record

Each Reserve Bank board has nine directors: three Class A chosen by and representing the stockholding banks, three Class B elected by the member banks to represent the public, and three Class C designated by the Board of Governors. Since the Dodd-Frank Act of 21 July 2010, the Class B and Class C directors appoint the Reserve Bank president, with Board approval, and the Class A directors take no part.

Class B and Class C directors may not be officers, directors or employees of any bank, and Class C directors may not be stockholders of any bank. Section 16 has the member banks nominate and elect the Class A and Class B directors in three groups of banks of similar capitalization.

Evidence: Exhibit 779, Exhibit 782

Mechanism: Oversight paid for by the overseen

§8.2.1

Section 1107 of the Dodd-Frank Act removed the Class A directors from the choice of a Reserve Bank president. The Class B and Class C directors appoint the president for a term of five years, with the approval of the Board of Governors.

§8.2.2

GAO's 2011 study of Reserve Bank governance found that directors have a limited role in supervision. It also found that "in practice, most Class A directors are officers or directors of member banks in the district." On 16 December 2010 the New York Fed revised its bylaws so that no more than two of the five audit committee members may be Class A directors.

Exhibit 779 · Statute

Federal Reserve Act, Section 4 (Reserve Bank organization and directors), as published by the Board of Governors

Class A shall consist of three members, without discrimination on the basis of race, creed, color, sex, or national origin, who shall be chosen by and be representative of the stockholding banks.

Each Reserve Bank board has nine directors in three classes. Class A (three) are chosen by and represent the stockholding banks; Class B (three) are elected by the member banks to represent the public and may not be officers, directors or employees of any bank; Class C (three) are designated by the Board of Governors and may not be officers, directors, employees or stockholders of any bank. Sec. 16 has the member banks nominate and elect Class A and B directors in three groups of banks of similar capitalization.

Source: Board of Governors of the Federal Reserve System
Date: 1913, as amended (page opened 10 November 2026)
Quoted from: Sec. 4, para. 10 (Class A directors), 12 U.S.C. 302, as numbered on federalreserve.gov
Grade: Primary record
Document: https://www.federalreserve.gov/aboutthefed/section4.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 782 · Statute

Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, sections 1103, 1107 and 1109

The president shall be the chief executive officer of the bank and shall be appointed by the Class B and Class C directors of the bank, with the approval of the Board of Governors of the Federal Reserve System, for a term of 5 years

Sec. 1107 amends Federal Reserve Act sec. 4 so a Reserve Bank president is appointed by the Class B and Class C directors only, with Board approval. Sec. 1103 requires disclosure of borrower names, amounts, rates and collateral for emergency credit facilities and discount window lending, one year after a facility ends. Sec. 1109(a) orders a one-time GAO audit of the 2007-2010 emergency facilities, including whether they favored particular participants and whether there were conflicts of interest; sec. 1109(b) orders the study of Reserve Bank governance.

Source: U.S. Congress
Date: 21 July 2010
Quoted from: Sec. 1107, 124 Stat. 2126
Grade: Primary record
Document: https://www.govinfo.gov/content/pkg/PLAW-111publ203/html/PLAW-111publ203.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit
Note: Further quotation: “there are authorized to be appropriated to carry out the functions, powers, and duties of the Commission--” (Sec. 991(c), new Securities Exchange Act sec. 35, 124 Stat. 1954; the five paragraphs that follow list $1,300,000,000 (FY 2011), $1,500,000,000 (FY 2012), $1,750,000,000 (FY 2013), $2,000,000,000 (FY 2014) and $2,250,000,000 (FY 2015)). Authorization of appropriations, not an appropriation. Approved 21 July 2010. Sec. 915 (124 Stat. 1830) separately establishes within the Commission the Office of the Investor Advocate, and a section 932 subsection establishes an Office of Credit Ratings; the latter heading was located but its text was not read in full.

Finding POL-8.3Primary record

A member bank must subscribe Reserve Bank stock equal to 6 percent of its paid-up capital and surplus, half paid in, and may not transfer or pledge it. Since 1 January 2016 a member bank above an inflation-adjusted $10 billion in assets (the Fed reports $12.8 billion for 2025) receives a cumulative dividend of the lesser of 6 percent and the 10-year Treasury high yield, and smaller banks receive 6 percent.

Shares are $100 each. Section 7 puts the dividend ahead of the surplus fund and the Treasury, and the dividend accumulates if unpaid.

Evidence: Exhibit 780, Exhibit 781, Exhibit 783, Exhibit 810, Exhibit 802

§8.2.3

The Federal Reserve Act sets the stock subscription in section 5 and the dividend in section 7. Section 32203 of the Fixing America's Surface Transportation Act of 4 December 2015 rewrote section 7(a)(1)(A), effective 1 January 2016. The Board adjusts the $10 billion threshold annually for the GDP price index.

§8.2.4

The Fed's 2025 financial statements add that a member bank "is liable for Reserve Bank liabilities up to twice the par value of stock subscribed by it." They report the dividend as paid semiannually and cumulative.

The Federal Reserve's position

The Board states: "The Federal Reserve System is not 'owned' by anyone." It describes Reserve Bank stock as a condition of membership and not an ownership stake in a private company. It says the Reserve Banks are not operated for profit and must transfer net earnings to the Treasury. It describes the Board as a federal agency accountable to Congress.

What the statute provides

Member banks hold the stock, and it cannot be sold or pledged. Member banks elect six of the nine directors on each Reserve Bank board. The dividend is capped at 6 percent. The statute places the dividend before the surplus fund and the Treasury.

§8.2.5

The statute and the financial statements establish the stock terms, the director classes and the dividend rate, and each is stated above.

Exhibit 780 · Statute

Federal Reserve Act, Section 5 (stock in Federal reserve banks), as published by the Board of Governors

Shares of the capital stock of Federal reserve banks owned by member banks shall not be transferred or hypothecated.

Shares are $100 each. A member bank subscribes an amount equal to 6 per centum of its paid-up capital stock and surplus, half paid in and half subject to call by the Board. Shares may not be transferred or hypothecated.

Source: Board of Governors of the Federal Reserve System
Date: 1913, as amended (page opened 10 November 2026)
Quoted from: Sec. 5, para. 1 (amount of shares), 12 U.S.C. 282
Grade: Primary record
Document: https://www.federalreserve.gov/aboutthefed/section5.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 781 · Statute

Federal Reserve Act, Section 7 (division of earnings), as published by the Board of Governors

After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders of the bank shall be entitled to receive an annual dividend on paid-in capital stock

Sec. 7(a)(1) gives stockholders a cumulative annual dividend on paid-in capital stock: the smaller of the 10-year Treasury high yield and 6 percent for stockholders with more than $10 billion in total consolidated assets (inflation-adjusted), and 6 percent for all others. Net earnings remaining after dividend claims are met go to the surplus fund and then to the Treasury.

Source: Board of Governors of the Federal Reserve System
Date: 1913, as amended by Pub. L. 114-94 (page opened 10 November 2026)
Quoted from: Sec. 7(a)(1)(A), 12 U.S.C. 289(a)(1)(A)
Grade: Primary record
Document: https://www.federalreserve.gov/aboutthefed/section7.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 783 · Statute

Fixing America's Surface Transportation Act, Public Law 114-94, section 32203 (dividends of Federal reserve banks)

the rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend

Sec. 32203 rewrites Federal Reserve Act sec. 7(a)(1)(A), effective 1 January 2016. A stockholder with more than $10,000,000,000 in total consolidated assets receives the smaller of the 10-year Treasury high yield and 6 percent; a stockholder at or below that threshold receives 6 percent. The Board adjusts the threshold annually for the GDP price index. The Federal Reserve's 2025 statements report the threshold as $12.8 billion.

Source: U.S. Congress
Date: 4 December 2015
Quoted from: Sec. 32203(a), 129 Stat. 1739-1740
Grade: Primary record
Document: https://www.govinfo.gov/content/pkg/PLAW-114publ94/html/PLAW-114publ94.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 802 · Agency web page

Federal Reserve Board FAQ: Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone.

The Board's statement of its position: the System is not owned by anyone; the Board is a federal agency accountable to Congress; member banks hold Reserve Bank stock as a condition of membership; the Reserve Banks are not operated for profit and must transfer net earnings to the Treasury.

Source: Board of Governors of the Federal Reserve System
Date: Page opened 10 November 2026
Quoted from: First sentence of answer
Grade: Primary record
Document: https://www.federalreserve.gov/faqs/about_14986.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.3 The GAO audit of emergency lending

Finding POL-8.4Primary record

GAO's Table 8 totals $16,115 billion of loans across the Fed's broad-based emergency programs by adding every renewal of overnight loans without adjusting for term, and GAO found that loans outstanding peaked above $1 trillion in late 2008. Senator Sanders's release of 21 July 2011 described the audit as uncovering "$16 trillion in secret loans."

GAO's table adds loans that were repaid and renewed, so the total counts the same dollars many times. The method note on page 130 gives an example: a $10 billion overnight loan renewed daily for 30 business days adds $300 billion to the aggregate.

Evidence: Exhibit 784, Exhibit 785, Exhibit 800, Exhibit 782

§8.3.1

Section 1109(a) of the Dodd-Frank Act ordered a one-time GAO audit of the emergency facilities of 1 December 2007 to 21 July 2010. GAO issued GAO-11-696 in July 2011. The Highlights state that loans outstanding peaked above $1 trillion in late 2008.

§8.3.2

Table 8 on page 131 totals $16,115 billion of loans across the broad-based programs. GAO's note states that "Table 8 aggregates total dollar transaction amounts by adding the total dollar amount of all loans but does not adjust these amounts to reflect differences across programs in the term over which loans were outstanding." The $16.1 trillion is therefore a sum of transactions, and the amount outstanding at any one time peaked above $1 trillion.

§8.3.3

Senator Sanders issued his release on the day of the GAO report. It states that "the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world." The release is a senator's characterization of the report, and GAO's own wording is the table note above.

§8.3.4

Section 1103 of the Dodd-Frank Act required disclosure of borrower names, amounts, rates and collateral, and the Fed's FAQ lists the disclosure of 1 December 2010. The word "secret" in the release is the senator's characterization. GAO states that the closed programs had incurred no losses and that the New York Fed did not project losses on loans still outstanding. GAO-11-696 names no individual borrower or director.

Exhibit 784 · GAO report

Federal Reserve System: Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance (GAO-11-696)

Loans outstanding for the emergency programs peaked at more than $1 trillion in late 2008.

GAO's one-time audit under Dodd-Frank sec. 1109 of Fed emergency assistance, 1 December 2007 to 21 July 2010. Highlights: loans outstanding peaked above $1 trillion in late 2008; the Reserve Banks awarded 103 vendor contracts worth $659.4 million, and 8 of the 10 highest-value contracts were awarded noncompetitively. Table 8 (p. 131) totals $16,115 billion of loans across the broad-based programs, "not term-adjusted." p. 80: JPMorgan Chase was both a borrower and a vendor while its CEO served as a Class A New York Fed director; Lehman Brothers' CEO also sat on the board. p. 81: no evidence of systemic bias toward favoring institutions. Tables 10, 11, 16, 17, 19: BlackRock fees as vendor. Seven recommendations; the Board agreed they would benefit its response to future crises.

Source: U.S. Government Accountability Office
Date: July 2011
Quoted from: Highlights, "What GAO Found," first paragraph (unnumbered front matter)
Grade: Primary record
Document: https://www.gao.gov/assets/gao-11-696.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 785 · GAO report

GAO-11-696, p. 130: method note for Table 8 (total loans not adjusted for term)

Table 8 aggregates total dollar transaction amounts by adding the total dollar amount of all loans but does not adjust these amounts to reflect differences across programs in the term over which loans were outstanding.

Explains why Table 8's $16,115 billion total counts every renewal of overnight Primary Dealer Credit Facility loans as new borrowing. GAO's example: a $10 billion overnight loan renewed daily for 30 business days adds $300 billion to the aggregate although the institution borrowed $10 billion over 30 days.

Source: U.S. Government Accountability Office
Date: July 2011
Quoted from: p. 130 (printed page)
Grade: Primary record
Document: https://www.gao.gov/assets/gao-11-696.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 800 · Press release

Senator Sanders, "The Fed Audit" (press release)

the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world

Describes the GAO audit that the Sanders amendment to Dodd-Frank directed as uncovering "$16 trillion in secret loans." The $16 trillion is the sum of Table 8 of GAO-11-696 (loans not adjusted for term; see the GAO method note). The release is a senator's characterization of the GAO report, not GAO's own wording.

Source: Office of Senator Bernie Sanders
Date: 21 July 2011
Quoted from: Quoted statement of Senator Sanders, second paragraph
Grade: Primary record
Document: https://www.sanders.senate.gov/press-releases/the-fed-audit/
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.4 Directors and borrowers

Finding POL-8.5Primary record

GAO reported that JPMorgan Chase was both a borrower and a vendor in the Fed's emergency programs while its chief executive served as a Class A director of the Federal Reserve Bank of New York. The New York Fed's releases name Jamie Dimon, JPMorgan Chase's chief executive, as a Class A director from January 2007, reelected in February 2010 for a term ending December 2012.

The names come from the New York Fed's releases, not from GAO. The 2006 release says Dimon "has been elected a class A director of the Federal Reserve Bank of New York for a three-year term beginning January 2007."

Evidence: Exhibit 784, Exhibit 789, Exhibit 790

Mechanism: Oversight paid for by the overseen

§8.4.1

GAO's page 80 states that the chief executive of Lehman Brothers also sat on the New York Fed board. The 2010 release states that Class A directors are drawn from the banking community and that member banks in the Second District elect the six Class A and Class B directors. The Fed releases cited here give no reason for Dimon's service to the end of his term.

Finding POL-8.6Primary record

GAO identified at least 18 current and former directors from 9 Reserve Banks who were affiliated with institutions that used at least one emergency program, including 11 Class A directors who served between 2008 and 2010, and wrote that member-bank representatives on Reserve Bank boards create an appearance of a conflict of interest. GAO also found no evidence of systemic bias toward favoring particular institutions in the emergency programs.

GAO's governance study of 19 October 2011 states that the Class A requirement "creates an appearance of a conflict of interest" because the Fed supervises state-chartered member banks and bank holding companies. The report counts the 18 directors on page 39.

Evidence: Exhibit 786, Exhibit 784, Exhibit 801

Mechanism: Oversight paid for by the overseen

§8.4.2

The GAO record also states the Fed's side. GAO-11-696 states that directors did not participate directly in authorizing programs, setting terms or approving a borrower. It states that GAO "did not find evidence that appeared to indicate a systemic bias towards favoring one or more eligible institutions." The New York Fed told GAO that a chief executive providing market information "does not equate to participating personally and substantially" under 18 U.S.C. 208.

The Federal Reserve's summary

The Fed's FAQ states: "The audit found no conflicts of interest or material weaknesses in internal controls in the emergency facilities."

GAO's text

GAO-11-696 found directors did not take part in authorizing programs and found no evidence of systemic bias. GAO-12-18 found affiliated directors at 9 Reserve Banks and an appearance of a conflict built into the Class A seat. GAO-11-696 examined the authorization of programs and GAO-12-18 examined the composition of the boards.

Exhibit 789 · Press release

New York Fed: Dimon, Bollinger to Join New York Fed Board of Directors, Nooyi Reelected to Second Term

has been elected a class A director of the Federal Reserve Bank of New York for a three-year term beginning January 2007

Jamie Dimon, president and chief executive officer of JPMorgan Chase, is elected a Class A director for the term beginning January 2007.

Source: Federal Reserve Bank of New York
Date: 20 November 2006
Quoted from: First paragraph
Grade: Primary record
Document: https://www.newyorkfed.org/newsevents/news/aboutthefed/2006/oa061120
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 790 · Press release

New York Fed: Jamie Dimon and Jeffrey B. Kindler Reelected New York Fed Directors

Mr. Dimon and Mr. Kindler will be serving new three-year terms ending December 2012.

Dimon, chairman, president and CEO of JPMorgan Chase, is reelected a Class A director; the new term ends December 2012. The release states that Class A directors are drawn from the banking community and that the six Class A and B directors are elected by member banks in the Second District.

Source: Federal Reserve Bank of New York
Date: 5 February 2010
Quoted from: First paragraph
Grade: Primary record
Document: https://www.newyorkfed.org/newsevents/news/aboutthefed/2010/oa100205
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 786 · GAO report

Federal Reserve Bank Governance: Opportunities Exist to Broaden Director Recruitment Efforts and Increase Transparency (GAO-12-18)

We identified at least 18 former and current Class A, B, and C directors from 9 Reserve Banks who were affiliated with institutions that used at least one emergency program.

GAO's Dodd-Frank sec. 1109(b) study of Reserve Bank boards. Directors have a limited role in supervision. p. 32: "in practice, most Class A directors are officers or directors of member banks in the district," and the requirement "creates an appearance of a conflict of interest" because the System supervises state-chartered member banks and holding companies. pp. 38-40: at least 18 current and former directors from 9 Reserve Banks were affiliated with institutions that used an emergency program, including 11 Class A directors who served 2008-2010. Four recommendations; the Board agreed.

Source: U.S. Government Accountability Office
Date: October 2011
Quoted from: p. 39 (printed page; the continuation page prints its footer as "Page 31")
Grade: Primary record
Document: https://www.gao.gov/assets/gao-12-18.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 801 · Agency web page

Federal Reserve Board FAQ: Is the Fed's emergency lending audited by the Congress? Is information about the Fed's emergency lending provided to the public?

The audit found no conflicts of interest or material weaknesses in internal controls in the emergency facilities.

The Fed's own summary of the GAO audits. States the 21 July 2011 report found no conflicts of interest or material control weaknesses, notes the 19 October 2011 governance report, and lists the 1 December 2010 disclosure of borrower names, amounts, dates, rates and collateral.

Source: Board of Governors of the Federal Reserve System
Date: Page opened 10 November 2026
Quoted from: Bullet 1
Grade: Primary record
Document: https://www.federalreserve.gov/faqs/federal-reserve-lending-audited-by-congress.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit
Note: Compare with GAO-11-696 and GAO-12-18, which describe potential conflicts and an appearance of conflict.

Finding POL-8.7Primary record

Stephen Friedman resigned as Class C director and chairman of the New York Fed on 7 May 2009, writing that he had remained on the board under a Board of Governors waiver after Goldman Sachs became a bank holding company. The New York Fed's general counsel stated that Friedman's purchases of Goldman shares in December 2008 and January 2009 did not violate any Federal Reserve statute, rule or policy.

In the letter he wrote that "although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being mischaracterized as improper."

Evidence: Exhibit 788, Exhibit 787

Mechanism: Oversight paid for by the overseen

§8.4.3

Section 15 of the Federal Reserve Act provides that no Class C director may be an officer, director, employee or stockholder of any bank. Goldman Sachs became a bank holding company in 2008, and Friedman wrote that he stayed on under the Board's waiver authority to provide continuity. The general counsel, Thomas C. Baxter, Jr., stated his view that the share purchases "did not violate any Federal Reserve statute, rule or policy."

§8.4.4

The press reported Friedman's Goldman directorship, and neither Fed document states it. The Board's waiver is not among the cited records.

Exhibit 788 · Correspondence

Letter of Stephen Friedman to William C. Dudley, resigning as Class C Director and Chairman, Federal Reserve Bank of New York

although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being mischaracterized as improper.

Friedman resigns as a Class C director and chairman. He writes that after Goldman Sachs became a bank holding company he remained on the board under the Board of Governors' waiver authority, to provide continuity. Federal Reserve Act sec. 15 provides that no Class C director may be an officer, director, employee or stockholder of any bank.

Source: Stephen Friedman
Date: 7 May 2009
Quoted from: Letter, second paragraph
Grade: Primary record
Document: https://www.newyorkfed.org/medialibrary/media/newsevents/news/aboutthefed/2009/oa090507.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 787 · Press release

New York Fed: Stephen Friedman Resigns as Chairman of the New York Fed's Board of Directors

it is my view that these purchases did not violate any Federal Reserve statute, rule or policy.

Announces the chairman's immediate resignation; the deputy chair assumes the chair's duties. General counsel Thomas C. Baxter, Jr. states his view that Friedman's December 2008 and January 2009 purchases of Goldman shares did not violate Federal Reserve statute, rule or policy. Vice Chairman Donald Kohn thanks him.

Source: Federal Reserve Bank of New York
Date: 7 May 2009
Quoted from: Statement of Thomas C. Baxter, Jr., third paragraph
Grade: Primary record
Document: https://www.newyorkfed.org/newsevents/news/aboutthefed/2009/oa090507
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.5 BlackRock, 2008 to 2010

Finding POL-8.8Primary record

From 2008 to 2010 the New York Fed paid BlackRock fees across seven contract lines that sum to $212.0 million in GAO's tables. Four of the lines, worth $194.5 million, were awarded noncompetitively: Maiden Lane ($107.6 million), Maiden Lane III ($50.0 million), Maiden Lane II ($24.1 million) and Citigroup valuation ($12.7 million).

The seven lines are the three Maiden Lane vehicles and Citigroup valuation, which were noncompetitive, plus agency mortgage-backed securities management, risk reporting and the TALF collateral monitor, which were competitive.

Evidence: Exhibit 784

BlackRock fees from the New York Fed, 2008 to 2010, as printed in GAO-11-696
Contract line	Contract date	Award	Fees (USD)
Maiden Lane LLC (Bear Stearns assets), investment manager	9 September 2008	Noncompetitive	107,648,136
Maiden Lane III LLC, investment manager	25 November 2008	Noncompetitive	50,031,879
Maiden Lane II LLC, investment manager	12 December 2008	Noncompetitive	24,102,579
Citigroup lending commitment, valuation services	14 December 2008	Noncompetitive	12,700,000
Agency MBS purchases, investment manager	30 December 2008	Competitive	11,157,427
Agency MBS program, risk reporting	17 August 2009	Competitive	5,126,000
TALF, collateral monitor	16 February 2010	Competitive	1,250,000
Total (sum of the seven lines)			212,016,021

§8.5.1

The 2008 contracts began under the Bush administration and the later ones ran into the Obama administration. The Maiden Lane vehicles were financed by the New York Fed and bore the fees.

§8.5.2

GAO found that the Reserve Banks awarded 103 vendor contracts worth $659.4 million and that 8 of the 10 highest-value contracts were awarded noncompetitively. GAO accepted the stated reason of exigent circumstances. It found the awards "were consistent with FRBNY's acquisition policies," and the New York Fed chose vendors with prior knowledge of the assets. BlackRock had evaluated the AIG assets under an earlier AIG engagement (pp. 61-62).

§8.5.3

GAO also wrote that BlackRock and PIMCO managed similar assets for the New York Fed and for other clients who may have had competing interests. The New York Fed relied on BlackRock's ethical walls and did not require program-specific remediation plans. GAO recommended clearer guidance on competition exceptions and a finalized vendor conflict policy. The Board agreed that the recommendations would benefit its response to future crises.

8.6 BlackRock, 2020

Finding POL-8.9Primary record

On 24 March 2020 the New York Fed retained BlackRock Financial Markets Advisory as investment manager of the corporate credit facilities, and in February 2021 it ended or replaced BlackRock's roles. The published agreement of 11 May 2020 made BlackRock a fiduciary, barred fees on the facility's ETF holdings including BlackRock ETFs, and required neutral treatment of BlackRock ETFs.

The New York Fed's page states: "On March 24, 2020, the New York Fed retained BlackRock Financial Markets Advisory as a third-party vendor to serve as the investment manager for this facility." State Street was retained on 15 April 2020 as custodian and administrator after a request for proposals.

Evidence: Exhibit 791, Exhibit 792, Exhibit 793

§8.6.1

The New York Fed gave its reasons: BlackRock's "expertise with purchasing large amounts of all relevant types of corporate debt issuance and corporate bonds in the secondary market, deep knowledge and substantial experience in the corporate debt markets, and robust operational and technological capabilities." It began a competitive procurement for vendor roles on 5 October 2020. On 6 January 2021 it notified BlackRock that the Primary Market Corporate Credit Facility relationship would end on 5 February 2021. On 4 February 2021 it notified BlackRock that it was being replaced as cash investment manager for the Secondary Market Corporate Credit Facility.

§8.6.2

The agreement is 66 pages and is stamped "Cleared for Release." Section 1.2 states that the Manager "will act as a fiduciary to the Company." Exhibit A-2 requires the Manager to "treat BlackRock-sponsored ETFs on the same neutral footing as ETFs sponsored by other entities." If BlackRock ETF holdings exceed BlackRock's share of the corporate bond ETF market, the Manager must notify and consult the New York Fed, which may direct adjustments.

§8.6.3

Exhibit D bars fees on the facility's ETF holdings, including BlackRock ETFs, and reduces BlackRock's fee by the revenue BlackRock earns from BlackRock ETFs and money market funds the facility holds. The fixed fee was $2,000,000 for the second quarter of 2020, $1,000,000 for the third and $750,000 a quarter after. The asset-based fee was 2.5 basis points on the first $10 billion, declining above that. Exhibit G sets an information barrier and conflict procedures.

Exhibit 791 · Agency web page

New York Fed: Primary Market Corporate Credit Facility (vendors section)

On March 24, 2020, the New York Fed retained BlackRock Financial Markets Advisory as a third-party vendor to serve as the investment manager for this facility.

States the retention and the reasons for selecting BlackRock, and that on 6 January 2021 the New York Fed notified BlackRock it was ending the relationship effective 5 February 2021. State Street was retained 15 April 2020 as custodian and administrator after a request for proposals. Treasury made an equity investment in the SPV (Corporate Credit Facilities LLC); the SPV returned that equity in January and September 2021 and was terminated 17 December 2021.

Source: Federal Reserve Bank of New York
Date: Page opened 10 November 2026 (facility announced 23 March 2020)
Quoted from: Vendors section
Grade: Primary record
Document: https://www.newyorkfed.org/markets/primary-market-corporate-credit-facility
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 792 · Agency web page

New York Fed: Secondary Market Corporate Credit Facility (vendors and announcements)

On February 4, 2021, the New York Fed notified BlackRock that it would be replacing BlackRock as the cash investment manager and had identified a new vendor to perform that role going forward.

Describes the facility's purchases of corporate bonds and U.S.-listed ETFs. Lists the 5 October 2020 start of a competitive procurement for vendor roles, the 4 February 2021 notice replacing BlackRock as cash investment manager, ETF sales from 7 June 2021, completion of the portfolio sales by 31 August 2021, and the 90/10 Treasury/New York Fed split of the SPV's cash distributions in 2021.

Source: Federal Reserve Bank of New York
Date: Page opened 10 November 2026 (facility announced 23 March 2020)
Quoted from: Vendors section
Grade: Primary record
Document: https://www.newyorkfed.org/markets/secondary-market-corporate-credit-facility
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 793 · Contract

Secondary Market Corporate Credit Facility Investment Management Agreement between Corporate Credit Facilities LLC and BlackRock Financial Markets Advisory (with exhibits)

The Manager shall treat BlackRock-sponsored ETFs on the same neutral footing as ETFs sponsored by other entities.

Published by the New York Fed (66 pages, stamped "Cleared for Release"). Sec. 1.2 (p. 2): the Manager "will act as a fiduciary to the Company." Exh. A-2 (p. 42): BlackRock-sponsored ETFs are treated on the same neutral footing as others, and if holdings exceed BlackRock's market share of the corporate bond ETF market the Manager must notify and consult FRBNY, which may direct adjustments. Exh. D (p. 54): the Manager may not charge fees on the Company's ETF holdings, including BlackRock ETFs, and reduces its fee by BlackRock revenues from BlackRock ETFs and money market funds held. Fixed fee $2,000,000 for Q2 2020, $1,000,000 for Q3 2020, $750,000 a quarter after; asset-based fee of 2.5 basis points on the first $10 billion, declining. Exh. G: information barrier and conflicts mitigation procedures. The Agreement is dated 11 May 2020; the retention was announced 24 March 2020.

Source: Federal Reserve Bank of New York
Date: 11 May 2020
Quoted from: Exh. A-2 (Operating Guidelines), p. 42 of 66
Grade: Primary record
Document: https://www.newyorkfed.org/medialibrary/media/markets/SMCCF_Investment_Management_Agreement.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Finding POL-8.10Primary record

The Fed's trade-level workbook records $8,434,795,268 of ETF purchases by the Secondary Market Corporate Credit Facility between 12 May and 23 July 2020. BlackRock-sponsored ETFs were 48.9 percent of the total, Vanguard 34.2 percent and State Street 15.6 percent.

The workbook has three sheets: bond trades, ETF trades and counterparties. Its footnote states that it includes all ETFs purchased through 31 December 2020.

Evidence: Exhibit 794

ETF purchases by the Secondary Market Corporate Credit Facility, 12 May to 23 July 2020, by sponsor (sums of the Fed's trade-level workbook)
ETF sponsor	Purchases (USD billions)	Share
BlackRock	4.125	48.9%
Vanguard	2.884	34.2%
State Street	1.317	15.6%
All others	under 0.1	under 1%
Total (926 trades)	8.435

§8.6.4

The figures are sums of column J of the sheet "Trade-level ETF," grouped by column A. The local copy has SHA-256 42ddce76d524cc76a3e41fd81b0bf71ae4a35c2fea472d684bb752a710579146, and the workbook was downloaded on 10 November 2026. The largest funds were LQD ($2.349 billion), VCSH ($1.494 billion) and VCIT ($1.390 billion). The bond sheet lists 2,670 trades worth $5.834 billion. The sheet records purchases only.

§8.6.5

The ETF purchases were made from eligible sellers at market prices, not from BlackRock. The agreement's trigger for consultation is BlackRock's share of the U.S. corporate bond ETF market, and the cited records give no figure for that share in May to July 2020. The 48.9 percent share therefore cannot be compared with that trigger.

The agreement's terms

BlackRock acts as a fiduciary, may not charge fees on the facility's ETF holdings, must treat its own ETFs on a neutral footing and must consult the New York Fed above its market share. The facility also bought Vanguard and State Street ETFs.

What the terms leave open

The fee waiver covers fees on the facility's holdings. It does not address any rise in the value or assets of BlackRock ETFs when the facility buys them. The House letter of 22 April 2020 asked for an analysis of that effect. The cited records contain no such analysis.

Exhibit 794 · Dataset

Secondary Market Corporate Credit Facility transaction-specific disclosures (Section 11(s)), workbook released 30 December 2021

Fed workbook with three sheets: bond trades, ETF trades and counterparties. Footnote: "Includes all ETFs purchased through December 31, 2020." Derived by the researcher from the ETF sheet (926 trades, 12 May to 23 July 2020): purchase amounts total $8,434,795,268; by ETF sponsor BlackRock $4.125 billion (48.9%), Vanguard $2.884 billion (34.2%), State Street $1.317 billion (15.6%), others under 1%. Largest funds: LQD $2.349 billion, VCSH $1.494 billion, VCIT $1.390 billion. Bond sheet: 2,670 trades, $5.834 billion. Local copy SHA-256 42ddce76d524cc76a3e41fd81b0bf71ae4a35c2fea472d684bb752a710579146. The sheet records purchases only.

Source: Board of Governors of the Federal Reserve System
Date: 30 December 2021
Grade: Primary record
Document: https://www.federalreserve.gov/publications/files/section-11s-smccf-transaction-specific-disclosures-12-30-21.xlsx
Accessed: 2026-11-09
Cited by: Findings citing this exhibit
Note: Downloaded 10 November 2026; sums re-derivable by summing column J of sheet "Trade-level ETF" grouped by column A.

8.7 What the CARES Act says

Finding POL-8.11Primary record

Section 4019 of the CARES Act, signed 27 March 2020, bars from section 4003 transactions any entity in which the President, Vice President, an executive department head, a Member of Congress or a family member holds at least 20 percent. Section 4019 does not address Federal Reserve vendors, and section 4026 requires the Board to report each new facility to Congress within seven days.

Section 4003(b)(4) makes up to $454 billion of Treasury funds available for loans and investments in the Fed's section 13(3) facilities. Section 4020 creates the Congressional Oversight Commission.

Evidence: Exhibit 795

§8.7.1

Section 4019 is titled "Conflicts of Interest." Its text states that "no covered entity may be eligible for any transaction described in section 4003," and it requires certification. A covered entity is one in which the President, Vice President, executive department head, Member of Congress, or a spouse, child, son-in-law or daughter-in-law holds at least 20 percent.

§8.7.2

The section applies to borrowers and counterparties of the Treasury-backed facilities. It does not require disclosure of conflicts by the Fed's investment managers. The conflict terms for BlackRock are contractual and public, in the agreement summarized in section 8.6. Section 4026(b)(2) requires the Board to report to the Senate Banking and House Financial Services committees within seven days of authorizing a facility and every 30 days after, and to publish the reports.

Exhibit 795 · Statute

Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, sections 4003, 4019, 4020 and 4026

no covered entity may be eligible for any transaction described in section 4003

Sec. 4003(b)(4) makes up to $454,000,000,000 of Treasury funds available for loans and investments in Fed section 13(3) facilities. Sec. 4019 (Conflicts of Interest) bars any "covered entity" (an entity in which the President, Vice President, an executive department head, a Member of Congress or a spouse, child, son-in-law or daughter-in-law holds at least 20 percent) from sec. 4003 transactions and requires certification. Sec. 4020 creates the Congressional Oversight Commission. Sec. 4026(b)(2) requires the Board to report to the Senate Banking and House Financial Services committees within 7 days of authorizing a facility and every 30 days, and to publish the reports. Sec. 4019 does not address Fed vendors.

Source: U.S. Congress
Date: 27 March 2020
Quoted from: Sec. 4019(b), 134 Stat. 486
Grade: Primary record
Document: https://www.govinfo.gov/content/pkg/PLAW-116publ136/html/PLAW-116publ136.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.8 Letters and hearings in 2020

Finding POL-8.12Primary record

On 7 April 2020 Senators Cramer and Cruz and 15 Republican colleagues asked that BlackRock act without regard to investment policies it adopted for its own funds. On 22 April 2020 Representatives Garcia, Tlaib, Pressley and six Democratic co-signers asked for the contracts, BlackRock's conflict policies and documents on how the programs affect BlackRock's own ETFs.

Both letters were addressed to Treasury Secretary Mnuchin and Chair Powell. The Senate letter quotes the New York Fed's terms of 27 March 2020: BlackRock will act as a fiduciary, follow conflict policies and keep facility staff separate from its other engagements.

Evidence: Exhibit 796, Exhibit 797

§8.8.1

The Republican senators were concerned that BlackRock's announced screens on certain companies would disadvantage energy and transportation employers. Their letter states that "BlackRock must act without regard to this or other investment policies BlackRock has adopted for its own funds."

§8.8.2

The House letter asks the Treasury and the Fed to appoint an inspector general, submit the full contracts for both corporate facilities and disclose BlackRock's conflict policies, including the list of BlackRock staff above the internal wall. Its request 2 includes "Documents pertaining to how these programs will affect BlackRock's own ETF's, even if BlackRock does not retain the fees from their purchase." The letter also states BlackRock's size, lobbying and revolving-door figures. Those figures are the letter's own. The letters ask in opposite directions, and the cited records show no reply to the specific requests in either. The New York Fed later published the agreements.

Exhibit 796 · Congressional letter

Letter from Senators Cramer, Cruz and 15 Republican colleagues to Secretary Mnuchin and Chairman Powell on CARES Act implementation

BlackRock must act without regard to this or other investment policies BlackRock has adopted for its own funds.

Quotes the New York Fed's 27 March 2020 initial terms: BlackRock will act as a fiduciary to the facility, abide by conflict of interest policies and keep SMCCF staff segregated from other BlackRock engagements. The senators ask the Fed to say that BlackRock must disregard investment policies it adopted for its own funds (BlackRock had announced screens on certain companies). The worry is that those screens would disadvantage energy and transportation employers.

Source: U.S. Senate (Cramer, Cruz and 15 colleagues)
Date: 7 April 2020
Quoted from: p. 2
Grade: Primary record
Document: https://www.cruz.senate.gov/files/documents/Letters/2020.04.07%20-%20Letter%20to%20Powell%20Mnuchin%20re%20CARES%20Act%20Implementation%20.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 797 · Congressional letter

Letter from Reps. Garcia, Tlaib, Pressley and six Democratic co-signers to Secretary Mnuchin and Chairman Powell on BlackRock's contracts with the Fed

Documents pertaining to how these programs will affect BlackRock’s own ETF’s, even if BlackRock does not retain the fees from their purchase.

Asks Treasury and the Fed to appoint an inspector general, submit the full contracts for the PMCCF and SMCCF, disclose conflict policies including the list of BlackRock staff above the internal wall, and document how the programs affect BlackRock's own ETFs. Raises BlackRock's size, lobbying and revolving-door figures and the fossil fuel exposure of the facilities. The revolving-door count (more than 100 individuals) and the lobbying figure (more than $2 million a year) are the letter's own.

Source: U.S. House of Representatives (Garcia, Tlaib, Pressley and co-signers)
Date: 22 April 2020
Quoted from: p. 2, request 2, fourth bullet
Grade: Primary record
Document: https://pressley.house.gov/sites/pressley.house.gov/files/Congressional%20Letter%20to%20Fed%20Treas%204_22.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Finding POL-8.13Primary record

A staff analysis by the Democratic majority of the House Select Subcommittee on the Coronavirus Crisis reported that bonds the Fed bought through the Secondary Market Corporate Credit Facility came from companies that laid off more than one million workers. Chair Powell answered on 23 September 2020 that the Fed bought small amounts across about 800 issuers because it did not want to decide which companies to buy from.

The staff report is a one-party product of the subcommittee that Representative Clyburn chaired. It states that 383 issuers paid dividends and that fossil fuel issuers were over-weighted.

Evidence: Exhibit 798, Exhibit 799

§8.8.3

The report states that staff "analyzed the Fed's most recent disclosures about its corporate bond purchases and compared the transactions to public data on layoffs, dividend payouts, and legal violations." It mentions BlackRock once, on its climate statement. It does not analyze BlackRock's ETF holdings or fees.

§8.8.4

At the hearing Powell said the facility bought "very, very small amounts of bonds across 800 different issuers" in the secondary market, made no loans to the companies and "didn't want to be deciding which company to buy from and which not." He called the facility a success. The transcript contains no question on BlackRock, ETFs or conflicts. The cited records include no Republican-led House counterpart to this analysis.

Exhibit 798 · Congressional report

Select Subcommittee on the Coronavirus Crisis, "Prioritizing Wall Street: The Fed's Corporate Bond Purchases During the Coronavirus Pandemic," staff analysis

Select Subcommittee on the Coronavirus Crisis staff analyzed the Fed’s most recent disclosures about its corporate bond purchases and compared the transactions to public data on layoffs, dividend payouts, and legal violations.

Majority-staff analysis (the subcommittee was chaired by Rep. Clyburn). Reports that bonds the Fed bought through the SMCCF were issued by companies that laid off more than one million workers since March 2020, that 383 issuers paid dividends, and that fossil fuel issuers were over-weighted. Mentions BlackRock once, on its climate statement. Does not analyze BlackRock's ETF holdings or fees. A one-party staff product.

Source: House Select Subcommittee on the Coronavirus Crisis (Democratic majority staff)
Date: 23 September 2020
Quoted from: p. 1, second paragraph
Grade: Primary record
Document: https://coronavirus-democrats-oversight.house.gov/sites/evo-subsites/coronavirus-democrats-oversight.house.gov/files/Staff%20Report%20(9-23-2020)_FINAL.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 799 · Congressional hearing

Hybrid hearing with the Federal Reserve Chair Jerome H. Powell, Select Subcommittee on the Coronavirus Crisis, Serial No. 116-119

we didn’t want to be deciding which company to buy from and which not.

Chairman Clyburn puts the staff analysis to Chair Powell. Powell answers that the SMCCF bought small amounts of bonds across about 800 issuers, in the secondary market, without making loans to the companies, to avoid choosing among companies. He calls the facility a success. The transcript contains no question on BlackRock, ETFs or conflicts.

Source: U.S. House of Representatives, Select Subcommittee on the Coronavirus Crisis
Date: 23 September 2020
Quoted from: Hearing transcript, Chairman Clyburn exchange, pp. 14-15
Grade: Primary record
Document: https://www.govinfo.gov/content/pkg/CHRG-116hhrg41958/pdf/CHRG-116hhrg41958.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.9 Trading by Fed officials

Finding POL-8.14Primary record

The Fed's Office of Inspector General found that Chair Powell and Vice Chair Clarida did not violate the trading rules then in effect, that Dallas Fed President Kaplan violated no rule, and that Boston Fed President Rosengren did not report multiple 2020 trades on his disclosure form, and it found insufficient evidence for a law-enforcement referral in each case. On 4 September 2024 the OIG reported that Atlanta Fed President Bostic violated the FOMC blackout rule, the disclosure policies, the prohibited-holdings policy and the preclearance rule, and no insider-trading or federal conflict-of-interest law.

The Board asked the OIG on 4 October 2021 to review 2020 trading by Kaplan, Rosengren and Clarida, and the OIG added Powell's December 2019 transactions. Chair Powell requested the Bostic review on 14 October 2022, covering 2017 to 2021.

Evidence: Exhibit 804, Exhibit 805, Exhibit 806

§8.9.1

The OIG wrote that Powell and Clarida did not violate "laws, rules, regulations, or policies related to trading activities in effect at the time and as investigated by our office." It also wrote that the rules did not sufficiently support public confidence. For Kaplan it found that his 2020 disclosure form omitted trade dates and option sales, which created an "appearance of acting on confidential FOMC information."

§8.9.2

For Rosengren the OIG found that "he did not report multiple trades on his 2020 Form A." It found that brokerage statements and the form differed, and that his 2020 trades in real estate investment trusts during the period of Fed agency mortgage-backed securities purchases created an appearance of a conflict. Detailed reports were released on 18 January 2024, following closing memoranda of 11 July 2022.

§8.9.3

For Bostic the OIG found violations of the FOMC blackout rule through trades in managed accounts, of the disclosure statement policies from 2018 to 2022, of the prohibited-holdings policy through Treasury holdings above $50,000 from June 2021 to June 2022, and of the preclearance rule in two instances. It determined that there were no violations of insider-trading or federal conflict-of-interest law. The OIG states these violations and makes no finding of insider trading.

Exhibit 804 · Inspector general report

Report of Investigation on the Closing of 22-0028-I Board Trading Activity (Powell, Clarida)

we did not find evidence to substantiate the allegations that Chair Powell or Mr. Clarida violated laws, rules, regulations, or policies related to trading activities in effect at the time and as investigated by our office.

On 4 October 2021 the Board asked the OIG to review the 2020 trading of Kaplan, Rosengren and Clarida; the OIG added Chair Powell's December 2019 transactions. It found no violation by Powell or Clarida of the rules in effect, and insufficient evidence for a law-enforcement referral, while stating the rules did not sufficiently support public confidence.

Source: Federal Reserve Board Office of Inspector General
Date: 18 January 2024 (closing memorandum issued 11 July 2022)
Quoted from: Case 22-0028-I, p. 2
Grade: Primary record
Document: https://oig.federalreserve.gov/releases/investigation-closing-board-trading.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 805 · Inspector general report

Report of Investigation on the Closing of 22-0030-I Reserve Bank Trading Activity (Kaplan, Rosengren)

we found that he did not report multiple trades on his 2020 Form A.

Kaplan: no violation found, but his 2020 Form A omitted trade dates and option sales, which the OIG said created an "appearance of acting on confidential FOMC information." Rosengren: did not report multiple trades on his 2020 Form A, brokerage statements and Form A differed, and his 2020 REIT trades during the period of Fed agency MBS purchases created an appearance of a conflict. The OIG found insufficient evidence for a law-enforcement referral.

Source: Federal Reserve Board Office of Inspector General
Date: 18 January 2024 (closing memorandum issued 11 July 2022)
Quoted from: Case 22-0030-I, p. 2 (Rosengren)
Grade: Primary record
Document: https://oig.federalreserve.gov/releases/investigation-closing-reserve-bank-trading.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 806 · Inspector general report

Report of Investigation on the Closing of 23-0020-I Federal Reserve Bank of Atlanta President's Trading Activity

We found that Dr. Bostic violated

Requested by Chair Powell on 14 October 2022 for 2017-2021. The OIG found President Bostic violated the FOMC blackout rule (trades executed in managed accounts during blackout periods), the Reserve Bank disclosure statement policies (2018 to 2022), the prohibited holdings policy (Treasury holdings above $50,000, June 2021 to June 2022) and the preclearance rule (two instances). It determined there were no violations of insider trading or federal conflict-of-interest law.

Source: Federal Reserve Board Office of Inspector General
Date: 4 September 2024
Quoted from: Case 23-0020-I, p. 2
Grade: Primary record
Document: https://oig.federalreserve.gov/releases/investigation-closing-frb-atlanta-trading.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Finding POL-8.15Primary record

On 21 October 2021 the Board announced rules that prohibit purchases of individual securities by Federal Reserve policymakers and senior staff. In April 2023 the OIG found that hundreds of System staff with access to Class I FOMC information are not subject to the policy's additional controls.

The rules also require 45 days' advance notice, prior approval and a one-year holding period, and bar trading in periods of heightened market stress. Reserve Bank presidents must disclose transactions within 30 days.

Evidence: Exhibit 803, Exhibit 807

§8.9.4

The FOMC adopted its own policy in February 2022. The rules took effect on 1 May 2022, and preclearance began on 1 July 2022. The OIG's 2023 evaluation made six recommendations, and the Board concurred with all six. It found that ethics reviews rely on trust and not on verification of the disclosures.

Exhibit 803 · Press release

Federal Reserve Board announces a broad set of new rules on investment and trading by Federal Reserve policymakers and senior staff

a broad set of new rules that will prohibit the purchase of individual securities, restrict active trading, and increase the timeliness of reporting and public disclosure by Federal Reserve policymakers and senior staff

New rules bar purchases of individual securities, require 45 days' advance notice, prior approval and a one-year holding period, bar trading during periods of heightened market stress, and require Reserve Bank presidents to disclose transactions within 30 days. The FOMC adopted its policy in February 2022; the rules took effect 1 May 2022 and preclearance began 1 July 2022 (per OIG reports).

Source: Board of Governors of the Federal Reserve System
Date: 21 October 2021
Quoted from: First paragraph
Grade: Primary record
Document: https://www.federalreserve.gov/newsevents/pressreleases/other20211021b.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 807 · Inspector general evaluation

The Board Can Further Enhance the Design and Effectiveness of the FOMC's Investment and Trading Rules (2023-SR-B-006)

Hundreds of individuals throughout the Federal Reserve System who have access to Class I FOMC information are not subject to any of the additional controls implemented in the policy.

Evaluates the new investment and trading policy. Six recommendations; the Board concurred. Finds the policy does not reach hundreds of System staff with access to Class I FOMC information and that ethics reviews rely on trust rather than verification of the disclosures.

Source: Federal Reserve Board Office of Inspector General
Date: 26 April 2023
Quoted from: Executive Summary, p. 2 of 32
Grade: Primary record
Document: https://oig.federalreserve.gov/reports/board-FOMC-investment-trading-rules-apr2023.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.10 The deferred asset and dividends

Finding POL-8.16Primary record

In September 2022 most Reserve Banks suspended remittances to the Treasury and began a deferred asset, which was $243.5 billion on 31 December 2025 and $235.5 billion on 30 June 2026. The Reserve Banks paid dividends on member-bank stock throughout: $1.5 billion in 2023, $1.623 billion in 2024 and $1.688 billion in 2025.

The Reserve Banks transferred $76.0 billion to the Treasury in 2022 before the suspension. The deferred asset was $18.8 billion at the end of 2022 and $133.0 billion at the end of 2023.

Evidence: Exhibit 808, Exhibit 809, Exhibit 810, Exhibit 811, Exhibit 781

§8.10.1

The Fed's 2025 statements define it: "The deferred asset is the amount of net excess earnings the Reserve Banks will need to realize in the future before remittances to the Treasury resume." The balance was $215.955 billion at the end of 2024. Net losses before remittances were $77.621 billion in 2024 and $18.761 billion in 2025.

§8.10.2

The Fed attributes the losses to interest expense on reserve balances and repurchase agreements. In 2023 interest expense was $281.1 billion, of which $116.3 billion was interest on reserve balances. The Fed states that a deferred asset has no implications for monetary policy or its ability to meet its obligations.

§8.10.3

Dividends are a statutory first claim on earnings, as section 7 provides, and the dividend for large banks is the lesser of 6 percent and the 10-year yield. The 2023 figure is preliminary. The statements do not break the dividends down by bank.

Exhibit 808 · Press release

Federal Reserve Board announces preliminary 2022 financial information for the Reserve Banks

in September 2022, most Reserve Banks suspended weekly remittances to the Treasury and started accumulating a deferred asset, which totaled $18.8 billion by the end of the year.

2022 net income $58.4 billion; $76.0 billion transferred to Treasury in 2022; in September 2022 most Reserve Banks suspended weekly remittances and began a deferred asset, $18.8 billion at year-end. Net income $108 million from the COVID-19 facilities.

Source: Board of Governors of the Federal Reserve System
Date: 13 January 2023
Quoted from: Second paragraph
Grade: Primary record
Document: https://www.federalreserve.gov/newsevents/pressreleases/other20230113a.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 809 · Press release

Federal Reserve Board releases preliminary 2023 financial information for the Reserve Banks

In 2023, the Reserve Banks increased the deferred asset by $116.4 billion resulting in a cumulative deferred asset at year-end of $133.0 billion.

2023 expenses exceeded estimated earnings by $114.3 billion; interest expense of $281.1 billion, of which $116.3 billion was interest on reserve balances; statutory dividends $1.5 billion; deferred asset up $116.4 billion to $133.0 billion at year-end.

Source: Board of Governors of the Federal Reserve System
Date: 12 January 2024
Quoted from: Bullet list, final paragraph
Grade: Primary record
Document: https://www.federalreserve.gov/newsevents/pressreleases/other20240112a.htm
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 810 · Audit report

Federal Reserve Banks Combined Financial Statements as of and for the years ended December 31, 2025 and 2024

The deferred asset is the amount of net excess earnings the Reserve Banks will need to realize in the future before remittances to the Treasury resume

Deferred asset $243,481 million at 31 December 2025 and $215,955 million at 31 December 2024. Net loss before remittances $18,761 million (2025) and $77,621 million (2024). Dividends on capital stock $1,688 million (2025) and $1,623 million (2024). Note 3o: member banks subscribe 6 percent of capital and surplus, half paid in; shares may not be transferred or hypothecated; a member bank "is liable for Reserve Bank liabilities up to twice the par value of stock subscribed by it"; dividend threshold $12.8 billion (2025) and $12.5 billion (2024); dividend paid semiannually and cumulative.

Source: Board of Governors of the Federal Reserve System
Date: Issued March 2026
Quoted from: Note 3 (earnings remittances), paragraph 2
Grade: Primary record
Document: https://www.federalreserve.gov/aboutthefed/files/combinedfinstmt2025.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 811 · Agency report

Federal Reserve Banks Combined Quarterly Financial Report, June 30, 2026 (unaudited)

Combined Statement of Condition: deferred asset of $235,498 million at 30 June 2026 against $243,481 million at 31 December 2025.

Source: Board of Governors of the Federal Reserve System
Date: 28 August 2026
Grade: Primary record
Document: https://www.federalreserve.gov/aboutthefed/files/quarterly-report-20260828.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.11 Silicon Valley Bank

Finding POL-8.17Primary record

Greg Becker, chief executive of Silicon Valley Bank, served as a Class A director of the Federal Reserve Bank of San Francisco from 1 January 2019 while the Fed supervised the bank. The OIG wrote that his board service "created an appearance of a conflict of interest for the System" and reported hearing of no influence on supervision.

The San Francisco Fed's election circular of 10 September 2021 reports that Becker was re-elected by banks in Group One for a second term ending 31 December 2024. Because of his seat, the Board's Secretary and not the Reserve Bank acted on three Regulation K prior notices.

Evidence: Exhibit 812, Exhibit 813, Exhibit 814

Mechanism: Oversight paid for by the overseen

§8.11.1

The Barr review of 28 April 2023 states that, "Because Greg Becker, CEO of SVB and president and CEO of SVBFG, also served as a director on the board of the FRBSF starting on January 1, 2019, the three Regulation K prior notices (and the public welfare investments) were not eligible to be acted upon by FRBSF." Staff who were not involved in the supervision of SVB conducted the review under Vice Chair for Supervision Barr. It found that SVB's board and management failed to manage risks. It found that supervisors did not fully appreciate the vulnerabilities and "failed to take forceful enough action," and it tied the tailoring after the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act to a less assertive approach.

§8.11.2

The OIG's material loss review of 25 September 2023 heard of no conflicts or influence from the CEO's service on the board. It learned that senior officials considered removing him after the ratings downgrade discussions and decided to keep him on the board to avoid signaling the bank's condition. It learned that no System policy requires removing a bank official from a Reserve Bank board when the bank is rated less than satisfactory. The OIG suggested that the Board consider standards for Class A service and removal and encourage retired bank executives to serve as Class A directors.

Exhibit 812 · Agency notice

Federal Reserve Bank of San Francisco, Circular 3: Results of Director Election

was re-elected by banks in Group One as a Class A director for a second three-year term ending December 31, 2024.

Reports that Greg Becker, president and CEO of SVB Financial Group and CEO of Silicon Valley Bank, was re-elected by banks in Group One as a Class A director for a second three-year term ending 31 December 2024.

Source: Federal Reserve Bank of San Francisco
Date: 10 September 2021
Quoted from: Second bullet paragraph
Grade: Primary record
Document: https://www.frbsf.org/wp-content/uploads/09102021-Election-Circular-3-Results-of-Elections_final.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 813 · Agency report

Review of the Federal Reserve's Supervision and Regulation of Silicon Valley Bank (Vice Chair for Supervision Barr)

Because Greg Becker, CEO of SVB and president and CEO of SVBFG, also served as a director on the board of the FRBSF starting on January 1, 2019, the three Regulation K prior notices (and the public welfare investments) were not eligible to be acted upon by FRBSF and instead were acted on by the Secretary of the Board (table 10).

Self-assessment overseen by Vice Chair for Supervision Michael Barr by staff not involved in the supervision of SVB. Key takeaways: SVB's board and management failed to manage risks; supervisors did not fully appreciate the vulnerabilities, did not act quickly enough, and the tailoring approach after the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act and a shift in supervisory stance reduced standards and promoted a less assertive approach. PDF p. 90 notes that SVB's CEO sat on the San Francisco Fed board.

Source: Board of Governors of the Federal Reserve System
Date: 28 April 2023
Quoted from: PDF p. 90, text above fn. 118
Grade: Primary record
Document: https://www.federalreserve.gov/publications/files/svb-review-20230428.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

Exhibit 814 · Inspector general evaluation

Material Loss Review of Silicon Valley Bank (2023-SR-B-013)

We believe that the CEO’s service on the FRB San Francisco board of directors created an appearance of a conflict of interest for the System.

Matter for Management Consideration (p. 46): the OIG heard of no conflicts or influence from the CEO's service on the San Francisco Fed board, learned that senior officials considered removing him after the ratings downgrade discussions and decided to keep him on the board to avoid signaling the bank's condition, and learned there is no System policy requiring removal of a bank official from a Reserve Bank board when the bank is rated less than satisfactory. It suggests the Board consider standards for Class A service and removal and encourage retired bank executives as Class A directors.

Source: Federal Reserve Board Office of Inspector General
Date: 25 September 2023
Quoted from: Matter for Management Consideration, p. 46 of 53
Grade: Primary record
Document: https://oig.federalreserve.gov/reports/board-material-loss-review-silicon-valley-bank-sep2023.pdf
Accessed: 2026-11-09
Cited by: Findings citing this exhibit

8.12 The record by administration

§8.12.1

The pattern in this chapter is the Class A seat. GAO reports that most Class A directors are officers or directors of member banks in the district, and it counts directors of banks that used the emergency programs. It appears in 2008 and 2009, in 2011 and from 2019 to 2023. The table lists each record by the administration in office when it was made.

Records in this chapter by period and administration
Period	Administration	Records
2008	Bush	BlackRock hired from 9 September for Maiden Lane; Friedman chairs the New York Fed board; Dimon sits as Class A director
2009 to 2011	Obama, with a Democratic Congress in 2010	Friedman resigns; further BlackRock contracts; Dodd-Frank Act sections 1103, 1107 and 1109; GAO reports of July and October 2011
2015	Obama, with a Republican Congress	FAST Act changes the dividend, effective 1 January 2016
2019 to 2020	Trump	Becker begins as Class A director; CARES Act; BlackRock retained for the corporate facilities; Republican and Democratic letters in April 2020; Democratic-majority staff report in September 2020
2021 to 2024	Biden	Trading rules of October 2021; OIG reports of 2023 and 2024; SVB reviews; deferred asset begins in September 2022

§8.12.2

Scrutiny of the 2020 arrangement came from both parties in opposite directions, as section 8.8 records. The Select Subcommittee product is a Democratic-majority staff report, and the cited records include no Republican-majority House counterpart.

8.13 Questions the sources leave open

§8.13.1

The Board's waiver for Friedman and Goldman's 2008 and 2009 filings would settle the questions about Friedman's directorship. The New York Fed's quarterly vendor-cost reports would give the total fees for the 2020 facilities.

§8.13.2

The OIG reports on Kaplan and Rosengren have attachments with the amounts of their trades. Vanderlip's 1935 recollection and Warburg's 1930 text are the attendees' own accounts of the 1910 meeting.

Key findings

The Fed's history essay names six men at a secret 1910 meeting and says the 1913 Act kept the Aldrich plan's technical details and changed its political structure (8.1).
Each Reserve Bank board has three Class A, three Class B and three Class C directors, and since 2010 Class A directors do not appoint the president (8.2).
Member banks hold non-transferable stock and receive a capped cumulative dividend (8.3).
GAO's $16.1 trillion adds every renewal of overnight loans, and loans outstanding peaked above $1 trillion (8.4).
JPMorgan Chase was a borrower and vendor while its chief executive was a New York Fed Class A director (8.5).
GAO found affiliated directors at 9 Reserve Banks and an appearance of a conflict, and no evidence of systemic bias (8.6).
Friedman resigned as New York Fed chairman in May 2009 after staying on under a Board waiver (8.7).
BlackRock's fees from the New York Fed in 2008 to 2010 sum to $212.0 million, $194.5 million of it noncompetitive (8.8).
BlackRock was retained on 24 March 2020 under a published agreement with a fiduciary duty and no fees on ETF holdings (8.9).
BlackRock ETFs were 48.9 percent and Vanguard ETFs 34.2 percent of the facility's ETF purchases (8.10).
CARES Act section 4019 bars entities owned by top officials from the facilities and does not address vendors (8.11).
Republican senators and Democratic House members wrote about BlackRock in April 2020, in opposite directions (8.12).
A Democratic-majority staff report on the Fed's bond purchases drew Powell's answer about 800 issuers (8.13).
The OIG found rule violations by Bostic and an unreported-trades finding for Rosengren, and no rule violations by Powell or Clarida (8.14).
The Board adopted new trading rules in October 2021, and the OIG found hundreds of staff outside the added controls (8.15).
Dividends continued while remittances stopped, and the deferred asset reached $243.5 billion (8.16).
SVB's chief executive sat on the San Francisco Fed board, and the OIG found an appearance of a conflict and no influence (8.17).

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