Boston Federal Reserve Chairman Eric Rosengren has announced that he is retiring nine months ahead of schedule, citing deteriorating health from a long-standing kidney condition, most recently on trades he made during the pandemic. The announcement was made after controversy.
Rosengren’s announcement, which came in a September 27 letter (PDF) to Federal Reserve Chairman Jerome Powell, follows an uproar over trades he made in 2020, which were allowed by the Fed’s ethics rules, but with potential interests The conflict was criticized.
The Boston Fed chief said in the letter that he was resigning ahead of his scheduled retirement in June 2022, “to address some serious health issues that have worsened over the past 18 months and must be addressed.”
“It has become clear that I should aim to reduce my stress so that I can focus on my health issues and postpone my need for kidney dialysis for as long as possible,” Rosengren wrote in the letter. Year for kidney transplant list.
Rosengren has served as the head of the Boston Fed since 2007. His successor will become a voting member of the Fed’s rate-setting body, with a Boston Fed press release indicating that preparations to appoint Rosengren’s replacement are well underway.
The announcement of his retirement comes after the Wall Street Journal reported earlier in the month that he bought and sold securities in real estate investment trusts in 2020, a year when the Fed made extraordinary moves to boost the economy and bounce financial markets. measures taken. global pandemic. Dallas Fed chief Robert Kaplan also came under fire for making several individual stock trades during that period.
Kaplan and Rosengren both said they would abstain from any stock trading while taking leadership roles at their respective institutions and promised to sell all of their stock holdings and put the proceeds into passive investments by the end of September.
“Sadly, the presence of . . . permissible individual investment decisions has generated some questions, so I have made the decision to sell these assets to underscore my commitment to Fed ethics guidelines,” Rosengren said in a statement. said in. “It is extremely important to me that the presence of conflicts of interest is also avoided.”
Kaplan also issued a statement expressing regret for raising ethical concerns.
Following the stock trading disclosures, Powell ordered a review of ethics rules surrounding holdings and other financial activities by senior Fed employees.
Fed officials are subject to specific restrictions, such as not doing business during the so-called “blackout period” around each meeting of the Federal Open Market Committee (FOMC), when policy-sensitive information is distributed. They are also not allowed to hold stock in banks or mutual funds concentrated in the financial sector and are prohibited from reselling securities within 30 days of purchase.
But the Fed’s code of conduct also has broader language, stipulating that employees should “avoid any situation that could give rise to a genuine conflict of interest or the presence of a conflict of interest.”
Last year, the Fed slashed interest rates to near zero and launched a massive asset-buying program, generating about $120 billion in monthly purchases of Treasury and mortgage securities.
This News Originally From – The Epoch Times