The Washington Post
Powell orders review of ethics rules at Fed
Federal Reserve Chair Jerome H. Powell has ordered a sweeping review of the ethics rules governing financial holdings and dealings by senior officials at the U.S. central bank, a Fed spokesperson said Thursday.
Powell ordered the review late last week, the spokesperson said in an emailed statement, following recent reports that two of the Fed system’s 12 regional reserve bank presidents had been active investors during 2020, a notably volatile year for asset prices as the country battled the coronavirus pandemic. Those revelations, originally reported by the Wall Street Journal, prompted senior U.S. lawmakers, including Sen. Elizabeth Warren (D-mass.), to demand more stringent restrictions on such activities.
The rules that guide personal financial practices for Fed officials are the same as those for other government agencies, the spokesperson said. Moreover, the Fed has supplemental rules that are stricter than those for Congress and other agencies that are specific to its work.
Following news reports on their trading last week, Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren said they would divest any holdings of individual stocks by Sept. 30 and put the proceeds into index funds or cash.
Their investments were judged by in-house ethics officers to have complied with Fed ethics rules.
Still, their activity drew a sharp reaction given the context of a pandemic year when tens of millions faced joblessness and the economy was on the precipice of a threatened depression.