Sen. Elizabeth Warren has called on regional Federal Reserve Banks to impose rules that would prevent their leaders from trading individual stocks, The Wall Street Journal reported.
The Massachusetts Democrat's request, via letters addressed to the leaders of the 12 regional Fed banks, came after it was disclosed that Fed chiefs in Boston and Dallas actively traded stocks and other investments last year, the Journal reported Thursday.
"The controversy over asset trading by high-level Fed personnel highlights why it is necessary to ban ownership and trading of individual stocks by senior officials who are supposed to serve the public interest," Warren wrote, the Journal said.
"I am therefore asking that, within 60 days, you impose a ban on the ownership and trading of individual stocks by senior officials at the Federal Reserve Bank of Dallas.
"I am also asking that you impose strong and enforceable ethics and financial conflicts of interest rules for yourself and those that work for you at the Dallas Fed."
The language in the letters to the other cities was similar to that sent to Dallas, the Journal said. Warren asked for a response by Oct. 15 on how the banks would implement changes.
The Journal last week reported that Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren actively traded stocks and other investments during 2020.
Kaplan, who worked at Goldman Sachs Group, Inc. for more than 20 years before leaving in 2006, made multiple stock trades of more than $1 million each. He also bought and sold investments tied to interest rates and stock futures, the Journal reported.
Rosengren's trades were smaller but included a number of investments in real-estate-related securities. He frequently has warned about risks in the real-estate market.
Kaplan and Rosengren late last week said they would sell their stock holdings and move the money into cash or diversified investment funds by the end of the month, the Journal reported.
Both Kaplan and Rosengren said they believed their trades complied with their respective bank’s rules but will move to erase the perception of conflicts of interest.
The Journal reported that both the Boston and Dallas Fed banks said their officials' trading was consistent with their respective codes of conduct, which prevent the holding of bank stocks and limit trading around rate-setting Federal Open Market Committee meetings.
The 12 regional Fed banks, supposedly independent, operate under the oversight of the Federal Reserve in Washington.
The regional Fed leaders have extensive information about the economy and financial system, private knowledge of monetary policy deliberations, and participate in setting monetary policy.
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