The Federal Reserve on Thursday said it was banning senior officials from purchasing individual stocks or bonds and requiring investment activities to be limited to …
The Federal Reserve on Thursday said it was banning senior officials from purchasing individual stocks or bonds and requiring investment activities to be limited to broad-based products such as mutual funds. The move comes after disclosures of trading activity last month that triggered the resignation of two federal reserve presidents on the same day, an unprecedented loss of senior leadership for the central bank. The new restrictions will apply to the system’s 12 reserve bank presidents and the seven governors who sit on the central bank’s Washington-based board. It also applies to senior staff who advise them. “These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve,” said Federal Reserve Board Chair Jerome Powell. Last month, the Wall Street Journal broke the news that two Fed presidents had engaged in questionable trading. Dallas Fed President Robert Kaplan, a former top Goldman Sachs executive, made multiple million dollar plus stock trades in 2020, the paper reported. Boston Fed President Eric Rosengren’s trading in real estate related securities also came under fire, although his were at a much smaller scale.
