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EXCLUSIVE-Fed Bank chiefs pledge to adhere to ethics review in letter to Senator Warren


ছবি Photo from Reuters file: The Federal Reserve building is set against a blue sky on May 1, 2020 in Washington, USA. Reuters / Kevin Lamarck / File photo

(Reuters) – The presidents of the US Federal Reserve’s regional banks welcomed the review by Fed’s board of governors in a joint letter in response to criticism of their ethics policy by Democratic Senator Elizabeth Warren and pledged to make any changes in the process. .

“Recently, Federal Reserve Chairman Jerome Powell instructed the Board of Governors staff to conduct a comprehensive review of ethical rules regarding financial holding and activities approved by senior officials of the Federal Reserve.” “We welcome this important review and will apply any variable changes to the rules of conduct of each Federal Reserve Bank.”

The short letter, dated September 20, was written by St. Louis Fed President James Bullard on behalf of all banks and had the signature of the president of each bank.

Earlier in September, Warren wrote to banks asking them to tighten their ethics rules, which include restrictions on the ownership and private shares of senior Fed officials. The reply to the letter did not call for a ban on such business within days, as he had requested.

Warren’s letter follows a flurry of commercial activity by Robert Kaplan, president of the Dallas Fed, and Eric Rosengren, president of the Boston Fed, who made controversial investments last year to revive the central bank economy. Both announced last month that they would relinquish their positions, despite the Fed’s ethics officials clearing their businesses.

Powell has since ordered the central bank to review the rules of ethics governing financial holding and transactions. He also asked the Fed’s office of the Inspector General to look into the trading done by some senior officials.

It has done little to appease Warren, a member of the Senate Banking Committee, which would consider Powell if President Joe Biden renews him as Fed chair. Powell’s current term ends in February.

Two weeks ago, he said he opposed his rebuilding, calling him a “dangerous man” who repeatedly voted to destabilize Wall Street and punishing his leadership over apparent morality at the central bank.

On Thursday, Warren made it clear in response to a letter from regional Fed chiefs that he hoped they would follow strict ethics guidelines.

In an email to Reuters, he said, “Every Fed official should know that there is no room for even self-immolation.” For the rest of Powell’s term, he added, “I should follow strict anti-corruption and pro-democracy laws.”

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