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EXCLUSIVE Fed bank chiefs, in letter to Sen. Warren, pledge to comply with ethics review

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Oct 14 (Reuters) – The U.S. Federal Reserve’s regional bank presidents responded to criticism of their ethics guidelines by Democratic Senator Elizabeth Warren with a joint letter welcoming a review of the matter by the Fed’s Board of Governors and pledging to make any modifications that outcome from that course of.

“Recently, Federal Reserve Chair Jerome Powell has directed Board of Governors staff to conduct a comprehensive review of the ethics rules regarding permissible financial holdings and activities by senior Federal Reserve officials,” the presidents mentioned, in accordance to a replica of the letter seen by Reuters. “We welcome this important review and will apply any resulting changes to each Federal Reserve Banks’ Code of Conduct.”

The letter, dated Sept. 20, was written by St. Louis Fed President James Bullard on behalf of all of the banks and signed by every of the bank presidents.

Earlier in September, Warren wrote to the banks asking them to tighten their ethics guidelines together with a ban on the possession and buying and selling of particular person shares by senior Fed officers.

It adopted a furor over the buying and selling actions of Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren, who made controversial trades final yr because the central bank undertook a rescue of the financial system. Both introduced final month they’d depart their positions regardless of their trades being cleared by the Fed’s ethics officers.

Powell has since ordered a sweeping review of ethics guidelines governing monetary holdings and dealings on the central bank. He has additionally requested the Fed’s workplace of the inspector common to look into the buying and selling achieved by sure senior officers.

Reporting by Lindsay Dunsmuir, Ann Saphir and Jonnelle Marte; Editing by Andrea Ricci

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