Two Fed officials have vowed to sell their individual stock holdings after investigation
The rules could be more stringent for Federal Reserve officials when regional Fed chairmen made trades that attracted some high-profile scrutiny and calls for a moratorium on such transactions.
The Fed says Chairman Jerome Powell has ordered a review of the central bank’s policies to see if changes need to be made.
“Since the confidence of the American people is essential for the Federal Reserve to effectively fulfill our important mission, Chair Powell last weekend asked board staff to discuss ethics rules around the financial holdings and activities allowed by the senior Fed. Instructed to look at the new and comprehensive authorities,” a Fed spokesman said in a statement. “This review will help identify ways to further tighten those rules and standards. The Board will make appropriate changes, and any changes to the Reserve Bank Code of Conduct will be added.”
Recent revelations from the Fed’s dozen regional bank chiefs revealed that Dallas Fed Chairman Robert Kaplan made several individual stock trades worth more than $1 million last year, and Boston Fed President Eric Rosengren from multiple real estate investment trusts. Bought and sold assets including associated transactions.
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Neither Kaplan nor Rosengren violated Fed policies in their holdings or trading, but both announced that they would seek to rid their personal holdings of any impropriety after their disclosures put negative pressure on the institution. will sell to Other regional Fed chairmen also have millions of holdings, but they didn’t trade last year.
“The basic rules guiding individual financial practices for Federal Reserve officials are similar to those of other government agencies,” a Fed spokesperson further said in its statement. “We also have a set of supplemental rules that are stricter than those that apply to Congress and other agencies that are specific to the work we do at the Federal Reserve.”
The Fed’s statement on Thursday comes a day after Sen. Elizabeth Warren, D-Mass, sent a letter to each regional Fed chair asking them to restrict ownership of individual stock by senior executives within the next 60 days. .
“This financial activity has prompted concerns about far-reaching policymaking implications and conflicts of interest among high-level officials with extraordinary access to information about the economy, raising questions about ‘self-treating’ by Fed officials.” However, the concern was ‘Fed Chairs’ access to information that could benefit their personal business, and the notion that ‘a person who influences monetary policy …[is] ‘making money for itself in the stock market’ – especially ‘the Fed spent last year unveiling never-before-seen programs to protect a wide range of financial markets from the fallout of the pandemic,'” she told The New York Times Quoting an article written by.