Scott Detro, Scott Horsley, FED discussed on Morning Edition


Mostly sunny with a high nearest 68 today and most like body deny with a lower round 54 so it's going to feel very much like fall once again and especially this weekend Saturday partly sunny and in the low 60s and then cool yes chilling Saturday night and then Sunday sunny with a high near 6th Right now 63 and mostly cloudy in New York Central Park It's 5 45 This is NPR news I'm Steve with Scott detro the Federal Reserve is adopting some strict new rules after an outcry over stock trading by top officials there This involves active trading by a couple of regional fed bank presidents in Boston and Dallas and PR Scott horsley is our chief economics correspondent in discovering this story Scott good morning Good morning Steve You know I hadn't even ever thought about this but I guess you know bank members have portfolios but I'm still surprised to hear them doing this trading What happened When reporters study the financial disclosure forms that many fed officials are required to file each year they found that two regional fed bank presidents had been actively buying and selling stocks and other securities during the pandemic in particular as you mentioned the head of the Dallas fed Robert caplan traded millions of dollars in shares of companies like Amazon and Delta Air Lines They had the Boston fed Eric Rosenberg traded smaller amounts of securities that were tied to real estate And all this was happening at a time the fed was pumping trillions of dollars into the economy and while both men argued their trading was not a violation of existing ethics rules of the Central Bank the chairman of the fed Jerome pal acknowledged it was not a good look No one is happy to be in this situation to be having these questions raised It's something we take Very very seriously Now since then the two regional bank presence have retired and pal promised that the fed would adopt more stringent ethics policies that's now what's being rolled out It sounds like this is yet another of these areas where there was a norm that people would have observed but there was not an absolute rule Now it sounds like more of a rule What's it going to do Well there were rules but they're now stricter the new rule limits what and when fed officials are allowed to trade It applies to both officials here in Washington and the regional fed banks They are barred from buying individual stocks They're also prohibited from holding individual bonds and anything tied to government backed securities Officials can still have broad based investments like mutual funds but they're required to hold them for at least a.

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