US Fed announces stricter investment rules for central banker officials

[WASHINGTON] The US Federal Reserve on Thursday announced stricter investment rules for central banker officials following recent controversies over trading activities.

The rules would prohibit Fed officials holding individual stocks, prohibit trading during times of unusual market stress, require pre-approval of trades, and more frequent disclosure of trading activity to "help guard against even the appearance of any conflict of interest," the Fed said.

"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," Fed Chair Jerome Powell said in a statement.

Powell became the target of criticism this week after disclosure documents showed he pulled US$1 million to US$5 million out of a stock index in October 2020, just before a sharp single-day drop in the US market.

Two other senior officials resigned recently following disclosures that they had traded individual stocks last year, as the Fed was working to shore up the economy amid the pandemic crisis.

Fed officials told reporters that they were working on the details of the new investment rules, which also will apply to senior staff.

Some central bankers may have to divest some of their holdings to comply with the stricter requirements, they said.

AFP