Mr. Powell and his colleagues have in recent months revamped the central bank’s ethics guidelines — in October releasing plans to overhaul them and prevent many types of financial activity, including trading during times of turmoil. He may point to that as a sign of how seriously the Fed has taken the issue.
Mr. Clarida’s resignation is the latest development in a monthslong trading scandal that has embroiled top officials and prompted high-profile departures at the Fed.
Financial disclosures released in late 2021 showed that Robert S. Kaplan, the former president of the Federal Reserve Bank of Dallas, had made big individual-stock trades, while Eric S. Rosengren, the former Boston Fed president, had traded in real estate securities. Those moves drew immediate and intense backlash from lawmakers, ethics experts and former Fed employees.
Fed officials were actively rescuing a broad swath of markets in 2020. In March and April, they slashed rates to zero, bought mortgage-tied and government bonds in mass quantities, and rolled out rescue programs for corporate and municipal debt.
The concern is that continuing to deal in affected securities for their own portfolios throughout the year could have given officials room to profit from their privileged knowledge.
Mr. Kaplan resigned in September, citing the scandal; Mr. Rosengren resigned simultaneously, citing health issues.
Mr. Clarida’s term was scheduled to end at the close of this month because his seat as governor was expiring. Bloomberg News first reported on his stock fund purchase — what was visible before he corrected the disclosure — in October.
Article source: https://www.nytimes.com/2022/01/10/business/economy/richard-clarida-fed-resign.html
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