Washington (AP) – Independent investigators are investigating whether the Federal Reserve Board of Governors broke the law in last year’s financial transactions, which were the subject of Congressional scrutiny and lively criticism from outside the central bank.
The Federal Reserve Board of Governors will investigate “whether the business activities of certain senior officials complied with both ethical rules and relevant laws,” the Federal Reserve Board said on Monday. The Inspector General is an independent body.
“We welcome this review and take appropriate action based on the results,” the central bank said.
Last week, the governor of the regional Federal Reserve Robert Kaplan and Eric Rosengren resign After it was revealed that an important deal had been reached in 2020, the deal was trillions of dollars for the federal government to cut short-term interest rates to near zero, stabilize financial markets and stimulate the economy early. This was done when I bought the bond. A few weeks of pandemic. The two bank governors said they could benefit financially from their actions.
Kaplan, former chairman of the Federal Reserve Bank of Dallas and former partner of Goldman Sachs, traded millions of dollars in shares last year with 22 companies, including Apple, Facebook and Chevron. Rosengren, a former Boston Fed chairman, invested in a real estate fund that holds the same type of mortgage-backed securities that the Fed itself started buying last year.
Bloomberg News said on Friday that Federal Reserve Vice Chairman Richard Clarida sold $ 1-5 million in fixed income funds and bought two equity funds on February 27, 2020. I reported. range. The deal came the day before the Fed issued a statement that it was “closely monitoring” the new pandemic and its economic implications. The Federal Reserve lowered the benchmark interest rate a few days later.
Earlier Monday, Democratic Senator Elizabeth Warren asked the Securities and Exchange Commission to investigate investments made by the three employees and determine whether they violated insider trading rules.
“The Fed’s report on this financial activity raises serious questions about possible conflicts of interest and reveals that it ignores public confidence,” said the Massachusetts senator. âThey also reflect the vicious judgments of these officials. “
Rosengren and Kaplan both said their deal did not violate Fed rules. Nonetheless, the Fed’s ethical guidelines, similar to those of other senior government officials, limit transactions that appear to be of conflicting interests. Clarida has not commented on her transaction.
All three officials participated in the Fed’s debate on whether to raise or lower interest rates or take other measures to impact the economy. They are also aware of the large amount of data being tracked and analyzed by Fed economists, and their public comments can boost the market.
Clarida was appointed to the Fed by President Donald Trump in 2018. Previously, he worked for PIMCO, an investment management firm specializing in fixed income securities, for 12 years. He was promoted to Managing Director of PIMCO in 2015. Rosengren has spent most of his career at the Federal Reserve Bank in Boston.
Federal Reserve Board of Governors Jerome Powell Said at a parliamentary hearing last week The Rosengren-Kaplan transaction appears to be âwithin existing rulesâ and âthe problem is that the rules, practices and information need to be improved, that’s what we’re working on. “
The Fed to investigate the financial transactions of those responsible | Job