New York Fed names AFL-CIO's Hughes as chairman

WASHINGTON Aug 24 (Reuters) - The Federal Reserve Bank of New York on Monday named labor leader Denis Hughes as chairman of its board of directors, filling a vacancy created when the previous chairman stepped down amid questions over his purchases of Goldman Sachs (GS.N) stock.

Hughes, who has served as acting chairman since Stephen Friedman stepped down in May and who is president of the New York State AFL-CIO, was named chairman for the remainder of 2009.

Regional Fed bank chairmen are designated annually. The U.S. central bank is comprised of a seven-member Board of Governors in Washington and 12 regional Fed banks.

Friedman, a retired chairman of Goldman Sachs, had said he stepped down from the New York Fed in order to spare the Fed unnecessary distraction. Friedman said he had been in full compliance with the Fed's rules.

Goldman became Fed-regulated in September when it switched its status from an investment bank to a bank holding company, winning access to Fed lending facilities to help it ride out a global financial panic after the failure of rival Lehman Brothers.

The New York Fed said the vice chairman position, which Hughes had held before becoming acting chairman, will be filled for the rest of this year by Lee Bollinger, president of Columbia University.

Two positions on the New York Fed's board still remain open, but a bank spokesman said he expects they will be filled shortly. (Reporting by Alister Bull; Editing by Leslie Adler)