Fed to review ethics rules after high-profile trades

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Fed to review ethics rules after high-profile trades

The rules for regional Fed presidents could become more stringent after high-profile Fed officials made trades that drew some high-profile scrutiny and sparked calls for a prohibition of 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.

The trust of the American people is essential for the Federal Reserve to efficiently carry out our important mission, Chair Powell told board members to take a fresh and comprehensive look at the ethics rules around permissible financial holdings and activities by senior Fed officials, a Fed spokesperson said in a statement. This review will assist in identifying ways to further tighten those rules and standards. As appropriate, the Board will add changes to the Reserve Bank Code of Conduct and any changes will be made to the code. Recent disclosures from the Fed's dozen regional bank chiefs revealed that Dallas Fed President Eric Rosengren made several individual stock trades over $1 million last year and Boston Fed President Robert Kaplan both bought and sold assets including transactions involving multiple real estate investment trusts.

Neither Kaplan nor Rosengren violated the Fed's policies in either their holdings or trading, but both announced that they would sell their individual holdings to get rid of any appearance of impropriety after their disclosures brought negative press on the institution. Other regional Fed presidents also make millions in holdings, but did not make any trades last year.

The core rules that guide personal financial practices for the Federal Reserve officials are the same as those for other agencies, the Fed spokesperson said further in their statement. We also have a set of additional rules that are different from the rules that apply to Congress and other agencies are specific to the work we do at the Federal Reserve. The Fed's statement comes a day after Sen. Elizabeth Warren came to Daly for the first time. Send letters to each regional Fed president calling for them to prohibit the ownership of individual stocks by senior officials within the next 60 days.

This financial activity has raised concerns about conflicts of interest among high-level officials with extraordinary policymaking influence and the far-reaching access to information about the economy, raising questions about self-dealing by Fed officials, concerns 'that Fed Presidents had access to information that could have benefited their personal trading, and perceptions that a guy who influences monetary policy is making money for himself in the stock market particularly as 'the Fed spent last year unveiled never-before - attempted programs to save a broad array of financial markets from