Monday, January 24, 2022

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    Fed Deputy Commander Resigns After Trading Scandal

    Richard Clarida, the embarrassed Vice-Chairman of the Federal Reserve Board, has resigned after being placed under the watchful eye of the transactions he made at the beginning of the pandemic.

    The central bank announced on Monday that Clarida, whose four-year term was set to expire at the end of the month, will leave his position on Friday.

    Clarida’s resignation follows amended disclosures such as: It came to light Last week it showed that it was more active in the financial markets in 2020 than he first revealed.

    His resignation represents the third major resignation of Fed officials in recent months over trade activity. Eric Rosengren and Robert Kaplan, who headed two regional bank branches, Resignation During September.

    “It’s very bad for a central bank to resign three senior officials in the coming months because of fraud,” said a former Fed staff member.

    The trading scandal first occurred in September last year when Rosengren and Kaplan were found to have frequently bought and sold individual shares while holding shares in several mutual funds.

    Meanwhile, Clarida was between $ 1 million and $ 5 million from bond funds to equity funds a few days before the Federal Reserve announced emergency measures to strengthen financial markets as the Covid-19 crisis intensified. moved.

    Last week, an amended disclosure revealed that Clarida had sold $ 1 to $ 5 million in shares from the same equity fund three days before the previously reported transaction. The Federal Reserve Vice-Chairman said the failure to report these transactions was the result of “inadvertent errors.”

    Previously unreported transactions questioned the Fed’s previous account that Clarida’s transactions were part of a “pre-planned rebalancing.”

    David Wessel, director of the Fiscal and Monetary Policy Center at the Brookings Institution, a Washington think tank, said:

    “This is bad for the Fed. Indeed, Fed officials have long argued that they are an elite group that is more satisfied with bankers than other societies,” Wessel said. It will be fueled. “

    In his resignation to US President Joe Biden on Monday, Clarida, who has played his role since 2018, did not mention the transaction dispute.

    Ethics experts become Fed’s independent government oversight body Ongoing investigation To the legality of the transaction recently disclosed by Clarida. We are already investigating whether other transactions by the Chief Executive Officer meet ethical standards and comply with the law.

    October Fed in response to scandal overhaul The trading rules of senior staff, the purchase of individual stocks are totally banned, and many other investments are banned.

    In his letter to Biden, Clarida is “proud” that working for the Fed was “a clear honor and immeasurable privilege” and had the opportunity to help shape central bank policy. “.

    In response to Clarida’s resignation, Federal Reserve Chairman Jay Powell said: .. .. It will leave a lasting impact on the central banking arena. ”

    Fed Deputy Commander Resigns After Trading Scandal

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    The post Fed Deputy Commander Resigns After Trading Scandal appeared first on Eminetra.

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