The Federal Reserve and Goldman Sachs: Mike Silva

9 Pages Posted: 30 May 2017

See all articles by Morela Hernandez

Morela Hernandez

University of Virginia - Darden School of Business

Bidhan L. Parmar

University of Virginia - Darden School of Business

Jenny Mead

University of Virginia - Darden School of Business

Abstract

Mike Silva, the NY Fed's senior supervisory officer for Goldman Sachs, is having trouble with Carmen Segarra, a recently hired bank examiner who reports to Silva. The two disagree about whether Goldman Sachs has a viable overall conflict-of-interest policy; Silva says “yes,” and Segarra says “no.” Segarra's communication style—aggressive and frank—has irritated both Silva and others in their department, although an independent report had been critical of the NY Fed for being too cozy with the banking institutions it regulated. The tension between Silva and Segarra has reached a breaking point, and Silva must decide how to handle Segarra and whether to fire her. A teaching note accompanies this case and details how it is taught in Darden's ethics and leading organizations courses.

Excerpt

UVA-OB-1078

Rev. Mar. 15, 2016

The Federal Reserve and Goldman Sachs: Mike Silva

As Mike Silva watched Carmen Segarra leave his office, he felt his headache intensifying. It was early 2012, and Silva, the Federal Reserve Bank of New York's (NY Fed) senior supervisory officer for Goldman Sachs, had just had one of many combative arguments with Segarra, recently hired as a NY Fed bank examiner assigned to Goldman Sachs. Segarra was highly skilled, but she had an aggressive and vociferous personality, which had rubbed some of her colleagues the wrong way and threatened to disrupt the somewhat delicate relationship between Silva's division and Goldman Sachs. Both Silva and Segarra's immediate supervisor had talked to her about toning down her criticism, both of the NY Fed's management and also of Goldman Sachs's policies, but to no avail. The issue at the center of the morning's argument was Goldman Sachs's compliance policy. Segarra claimed that Goldman Sachs did not have a company-wide conflict-of-interest policy. Silva disagreed; although it was an imperfect and somewhat chopped-up policy, Silva believed it was nonetheless a policy. He had told her that, as a legal matter, a company or organization could have a policy that was not in writing. No matter what he said, Segarra refused to change her mind or compromise on the issue. The relationship between regulators and financial institutions was complicated, and Silva worried that Segarra's vocal complaints might inject a hostile tone into his division's relationship with Goldman Sachs. After all, this particular division was actually embedded in the bank itself, as was customary with NY Fed regulators and the institutions they oversaw. Silva was not sure what to do; his approach to his job was collaborative, but Segarra's was confrontational.

. . .

Keywords: leadership and values, responsible leadership, regulatory capture, ethics, stakeholder management, Federal Reserve, supervision, management, conflict-of-interest policies, management communication, human resources, interpersonal behavior, Goldman Sachs, performance evaluation, conflict resolution, team management, managerial psychology, investment banking

Suggested Citation

Hernandez, Morela and Parmar, Bidhan L. and Mead, Jenny, The Federal Reserve and Goldman Sachs: Mike Silva. Darden Case No. UVA-OB-1078. Available at SSRN: https://ssrn.com/abstract=2974843

Morela Hernandez (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
+1-434-924-4917 (Phone)

HOME PAGE: https://www.darden.virginia.edu/faculty-research/directory/morela-hernandez/

Bidhan L. Parmar

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Jenny Mead

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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