WASHINGTON – Federal Reserve officials Kaplan and Rosengren announced their retirement from the Fed after receiving heavy scrutiny on their investment trades. This scrutiny brought about a planned review of the Fed’s ethics rules.
Dallas Fed President Robert Kaplan announced his retirement by October 8, 2021, because of the impact of his investments.
On the other hand, Eric Rosengren announced to retire by September 30, 2021, because of a long-term health condition that might hinder his service to the public.
Before this announcement, Kaplan and Rosengren already went under heavy fire as they received calls to step down for their investment trades last 2020.
The Fed underwent intense scrutiny after its intentions to steady the economy. However, after revealing recent financial statements disclosures, the Fed received questions about the effectiveness of the trading guidelines for policymakers.
The retirement was also a response to the mandate from Fed Chair Jerome Powell to conduct a thorough review of the trading practices within the department. Jerome Powell announced that there must be significant changes with the central bank’s ethics rules and policies.
According to the financial disclosure, Kaplan made multi-million-dollar trades on individual stocks last 2020. On the other hand, Rosengren received heavy criticism on calling out risks in the real estate sector after investing in real estate investment trusts.
Because of these criticisms, both Kaplan and Rosengren agreed to sell their stock holdings by September to prevent any future conflict of interest.
Nevertheless, both officials declared that all trading decisions aligned with the Fed’s ethics and policies.