Federal Reserve Chairman Jerome Powell said the new restrictions will ensure that senior officials "maintain a single-minded focus on the public mission of the Federal Reserve." Photo by Sarah Silbiger/UPI | License Photo
Oct. 21 (UPI) -- The Federal Reserve on Thursday tightened its rules on senior officials' financial activity after the agency came under scrutiny for personal investments.
The central bank said the new rules will prohibit senior officials from purchasing individual securities, restrict active trading, and increase the timeliness of reporting and public disclosure.
Under the new policies, Federal Reserve policymakers and senior staff will only be able to purchase diversified investments such as mutual funds.
"These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve," Federal Reserve Board Chairman Jerome Powell said.
To prevent the appearance of conflict of interest, affected officials will be required to give 45 days' advance notice before purchasing or selling securities, and obtain approval for such transactions. Investments must be held for at least a year and no purchases or sales will be permitted during times of heightened financial market stress, the Fed said.
Reserve Bank presidents must now publicly disclose financial transactions within 30 days, a requirement already in place for board members and senior staff.
The announcement came three weeks after Eric Rosengren, the president and CEO of the Federal Reserve Bank of Boston announced his retirement amid questions over real estate investments he made during the COVID-19 pandemic. Dallas Fed President Robert Kaplan also exited last month after a financial disclosure showed transactions in 27 stocks, each worth more than $1 million.
President Joe Biden delivers remarks at the ceremony marking the 10th anniversary of the dedication of the Martin Luther King, Jr. Memorial on the National Mall on Thursday. Photo by Oliver Contreras/UPI | License Photo