U.S. senator demands Fed chair disclose details on trading by officials -Breaking
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© Reuters. FILEPHOTO: U.S. FILE PHOTO – U.S.(Reuters) – U.S. Senator Elizabeth Warren is a member of the Senate committee overseeing the Federal Reserve. He has requested that the central bank reveal its leadership’s personal investments as well as ethics guidance. This would allow more attention to Fed Chair Jerome Powell’s management of the conflict-of-interest controversy prior to his renomination hearing.
Two out of 12 Fed Bank chiefs have resigned after being exposed as having traded in stocks and other securities while the Fed did massive bond buying and other market intervention to help the U.S. during the 2020 COVID-19 epidemic.
Warren opposed Powell’s election as Fed chair. He will be retiring in February and no date has been set for Powell’s renomination hearing. Warren wrote Powell Monday and it was publicly published Tuesday.
In it, Warren said the disclosures were needed to “evaluate the full extent of trading in individual stocks by Fed officials, the extent to which Fed officials were warned of the risks from their trading, and whether the plans you announced to change the Fed’s ethics practices are sufficient to prevent future financial conflicts of interest.”
Robert Kaplan, Dallas Fed President, and Eric Rosengren (Boston Fed President), resigned because they did not follow the Fed’s ethical guidelines.
These disclosures may shed some light on the possibility that top Fed officials made a profit from personal trading. Warren would like to see the March 23rd 2020 letter from the Fed’s Ethics Office advising Fed officials to observe a blackout in trading while they were implementing crisis-fighting programs.
She also requested that Fed executives disclose all ethics guidelines provided since Jan. 1, 2020.
Powell has since changed the Fed’s ethics rules in order to restrain trading by high-ranking U.S. central bank officials.
Powell has requested an inspection general to investigate the trading.
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