The Federal Reserve announced new rules that restrict how some of its top officials and policymakers invest their money. Going forward, those officials will be barred from owning individual stocks and bonds and will be required to provide advanced notice and get approval before selling securities.
They will be required to hold any securities for at least a year and will be barred from making any trades during "heightened financial market stress."
"These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve," Federal Reserve Chairman Jerome Powell said in a statement.
The new rules were put in place following revelations that several top officials at the Central Bank were actively trading stocks in 2020 while they crafted policies aimed at helping the stock market rebound during the coronavirus pandemic. Those reports forced Dallas Regional president Robert Kaplan and Boston Regional President Eric Rosengren to resign their positions. Chairman Powell and Vice Chairman Richard Clarida were also named in those reports.
The Central Bank's inspector general is currently conducting an independent review to determine if the officials violated ethics rules or the law.