(Washington) The US Central Bank (Fed) on Thursday announced new rules, severely restricting investments in authorized markets to its officials after disclosures about transactions made by some members, leading to the resignation of two of them .
These new rules prohibit them “from acquiring individual shares, owning specific bonds, participations in securities of public agencies (directly or indirectly) (such as treasury bills, Editor’s note) or buying derivative products” .
“Fed officials will only be able to invest in diversified investment instruments, such as mutual funds,” said the institution in a press release.
These new conditions were put in place following the review of ethical rules launched by the Fed. Several officials, including its chairman Jerome Powell, were blamed for their large stock market transactions during the crisis, before market falls which had fueled suspicions of conflicts of interest.
Two leaders had to resign.
The officials of the powerful Federal Reserve will now have to refrain from carrying out transactions “during times of heightened stress in the financial markets” in order to “help guard against even the appearance of anything. conflict of interest “.
With this in mind too, their transactions will be strictly supervised: 45 days’ notice for purchases and sales of securities, prior authorization for transactions, and the obligation to hold these investments for at least one year.
The new regulations also impose more regular declarations of transactions.
“These tough new rules set the bar very high to assure the public we serve that all of our senior officials remain focused on the public mission at the Federal Reserve,” Fed Chairman Jerome Powell said in the statement.
He himself was singled out for having sold on the stock market on 1er October 2020 part of its assets, and recovered between one and five million dollars in cash, according to official documents available online.
These stocks, however, were held in an index fund, which brings together various companies listed on stock exchanges in the United States, and therefore does not target any particular sector.
Fed Vice President Richard Clarida also said large transactions in February 2020, at the very start of the COVID-19 pandemic, and just before the Fed cut rates managers to support the economy.
The presidents of the regional offices of the Fed of Dallas, Robert Kaplan, and of Boston, Eric Rosengren, had them, resigned.
The policeman of the Fed is also studying the rules of ethics related to the stock market activity of the leaders of the institution.