U.S. Senator Elizabeth Warren renewed her call for the Federal Reserve to release more information about the investment activity of officials during the pandemic last year and the ethics guidance given to policy makers in March as the spread of Covid-19 caused financial markets to convulse.
In a letter sent to Fed Chair Jerome Powell on Monday, Warren said that the Fed released “an excerpt of the email warning the officials to ‘avoid unnecessary trading,’” but that it has yet to “release the full email or any other ethics guidance issued at the time.”
The March 23, 2020, email excerpt -- sent from the Fed board’s ethics office to all participants of Federal Open Market Committee meetings -- stated that officials should “please consider observing a trading blackout and avoid making unnecessary securities transactions for at least the next several months, or until FOMC and board policy actions return to their regularly scheduled timing.” FOMC participants include governors, presidents of the 12 regional Fed banks as well as a number of senior staff.
Warren’s requests follow an ethics scandal that saw two regional Fed presidents step down following disclosures about their unusual trading activity last year as the Fed unleashed unprecedented policy support to shield the economy from the pandemic.
Powell subsequently announced a ban on top officials buying individual stocks and bonds and a limit on active trading. He also asked the Fed’s internal watchdog to examine the trading activity for senior central bankers last year.
Warren remains unconvinced that the remedies are sufficient.
“Given the paucity of information you have provided to Congress and the public about trading by Fed officials and your response to these breaches of Fed ethics rules, it remains unclear if you have done enough to address this scandal and prevent the next one,” she said in the letter.
The Massachussetts Democrat has been outspoken about her opposition to Powell, criticizing his handling of the trading scandal as well as his record on financial regulation more broadly. She also opposed his reappointment as Fed chair. President Joe Biden selected him anyway for another four years at the helm.
This article was provided by Bloomberg News.