– U.S. Senator Elizabeth Warren, who sits on the Senate committee that oversees the Federal Reserve, has demanded the central bank disclose its leaders’ personal investments and ethics guidance given to them, representing more scrutiny of Fed Chair Jerome Powell’s handling of a conflict-of-interest controversy ahead of his renomination hearing.
Two of the 12 Fed bank chiefs resigned this fall after revelations they personally traded stocks and other securities as the Fed was conducting massive bond purchases and other market interventions to rescue the U.S. economy during the 2020 COVID-19 pandemic.
Warren opposes Powell’s renomination as Fed chair. His term ends in February, and a date for his renomination hearing has not yet been announced. Warren sent a letter to Powell dated Monday and publicly released 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.”
Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren, the two officials who resigned, said they followed the Fed’s ethics guidelines.
The disclosures could shed light on whether top Fed officials profited from their personal trading. Warren wants to see a March 23, 2020 from the Fed’s ethics office advising Fed leaders to observe a trading blackout while the central bank was rolling out its crisis-fighting programs.
Her letter also demands the Fed disclose for the first time all ethics guidance provided to Fed leaders since Jan. 1 2020.
Powell has since rewritten the Fed’s ethics rules to restrict trading by top U.S. central banking officials, including the kind of trading Kaplan and Rosengren undertook.
An inspector general’s probe into the trading, sought by Powell, is ongoing.
(Reporting by Ann Saphir; Editing by Cynthia Osterman)
