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Powell Pledges Review of Fed’s Trading Rules

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Powell Pledges Review of Fed’s Trading Rules

Jerome H. Powell, the Federal Reserve chair, said there would be a review of the central bank’s ethics rules in response to concerns over trades made by two officials last year amid the Fed’s pandemic rescue efforts.

We understand very well that the trust of the American people is essential for us to effectively carry out our mission, and that’s why I directed the Fed to begin a comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials. So those rules are in many respects, the same as those for government agencies, plus a number of things that apply specifically to us because of our business. Everyone’s, you know, ownership and activities are all disclosed on an annual basis. So, you know, I would have had to go back and read people’s financial disclosures to know what their activities have been. This has been our framework for a long time, and I guess you’d say it’s served us well. The other thing you would say that it is now clearly seen as not adequate to the task of really sustaining the public’s trust in us. We need to make changes, and we’re going to do that as a consequence of this. This will be a thoroughgoing and comprehensive review. We’re going to gather all the facts, and look at ways to further tighten our rules and standards. No one is happy. No one on the FOMC is happy to be in this situation, to be having these questions raised. It’s something we take very, very seriously. This is an important moment for the Fed, and I’m determined that we will rise to the moment and handle it in ways that will stand up over time.

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