Fed to review ethics policy in light of regional presidents’ million dollar trades
Federal Reserve Board chairman Jerome Powell is asking his staff to review the central bank’s ethics rules for employees, including regional bank presidents, governing trades they make in their personal investment accounts.
The move comes after two regional bank presidents, Robert Kaplan of the Dallas Fed and Boston Fed president Eric Rosengren, disclosed they had made large trades in their personal investment accounts.
According to CNBC, a Fed representative said the review was necessary:
“…because the trust of the American people is essential for the Federal Reserve to effectively carry out our important mission,” the spokesman said. “This review will assist in identifying ways to further tighten those rules and standards. The Board will make changes, as appropriate, and any changes will be added to the Reserve Bank Code of Conduct.”
Better late than never.
But the problem with such a review is that it may indeed be too late to repair the damage this activity has already inflicted on the Fed’s reputation. When the individuals in charge of setting monetary policy – or even making speeches about what policy should be — are at the same time actively trading in the capital markets, that makes them the ultimate inside traders.
Though to be fair, they are probably still less crooked when it comes to trading on inside information than members of Congress.
It’s just more evidence for those who use cryptocurrencies to stay the course.