Tue. Jan 18th, 2022

Federal Reserve Chairman Richard Clarida is stepping down after being scrutinized for deals he made at the start of the pandemic.

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

Clarida’s resignation follows amended revelations that came to light last week, which showed that in 2020 he was more active in financial markets than he first revealed.

His departure is the third major resignation of a senior Fed official in recent months over trading activity. Eric Rosengren and Robert Kaplan, who managed two regional bank branches, thank you in September.

The trading scandal first erupted in September when Rosengren and Kaplan regularly bought and sold individual shares last year while also holding stakes in various investment funds.

Clarida, meanwhile, moved between $ 1 million and $ 5 million from a mutual fund to a mutual fund a few days before the Fed announced emergency measures to support financial markets as the Covid-19 crisis intensified.

Last week, amended revelations came to light that revealed that Clarida had sold between $ 1 million and $ 5 million worth of shares from the same equity fund three days before the already reported transactions. The Fed vice president said his failure to report those transactions was the result of “unintentional errors”.

The previously unreported transactions questioned the Fed’s earlier explanation that Clarida’s transactions were part of a “pre-planned rebalancing”.

In his resignation letter to President Joe Biden on Monday, Clarida, who has served in his role since 2018, did not mention the trade controversy.

Ethics experts call on the Fed’s independent government watchdog to expand its ongoing investigation to the legality of the trades recently announced by Clarida. It is already being investigated whether the other transactions by top officials comply with ethical standards and comply with the law.

In response to the scandal, the Fed in October redone its trading rules for senior staff, the implementation of a total ban on any purchase of individual shares and prohibits it from many other investments.

In his letter to Biden, Clarida said it was an “exceptional honor and immense privilege” to work for the Fed that he was “proud” to have the opportunity to help shape the central bank’s policies.

In response to Clarida’s resignation, Fed Chairman Jay Powell said: “Rich’s contributions to our monetary policy considerations. . . will have a lasting impact on the field of central banking. ”

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