On February 18, the Federal Open Markets Committee issued new rules on allowed investments for senior officials of the Federal Reserve.
Senior officials such as board members, presidents, first vice presidents, research directors and others who hold seniors posts, can no longer deal in stocks, derivatives, ETFs, cryptocurrencies, commodities, or foreign currencies for investment purposes.
Senior members may hold cetain assets such as foreign currencies as needed for daily use or when travel abroad for speeches and conferences.
The new rules were put in place as a result of former FED governor Richard Clarida, who was forced to resign in January after it was revelaed he profited from stock trades by buying and selling ahead of Federal Reserve announcements.
Other FED members have also come into the spotlight recently for making individual stock trades and profiting from privileged information.
Robert Kaplan, former president of the Federal Reserve Bank of Dallas, resigned in 2021 for making large stock trades, while former Boston Fed president Eric Rosengren, resigned in 2020 because of trading real estate securities while the FED was intervening in the mortgage-backed securities markets.
Image credit: 1
