U.S. Sen. Sherrod Brown (D-OH) is urging Federal Reserve Chair Jerome Powell to strengthen enforcement penalties under the Fed’s Investment and Trading Policy.
Brown, in a letter to Powell, cited a Fed report from March 2020 when two former Federal Reserve Bank Presidents traded securities in violation of the blackout period. Thus, he is asking Powell and the Federal Reserve Board to implement substantive penalties for Federal Reserve officials that engage in prohibited market trading activity. He would also like to see the Fed establish a sufficient review process to determine when officials violate the policy.
“Federal Reserve officials, as charged with setting monetary policy, must serve the American people—not their own investment portfolios. To restore trust that Federal Reserve officials are not using their access to sensitive economic and monetary policy information to enrich themselves, the Board should, without delay, establish a process for enforcing the Investment and Trading Policy and develop sufficient penalties for individuals that violate the policy. As such, I urge the Board to implement substantive penalties for Federal Reserve officials that engage in prohibited market trading activity. Nothing will change unless there are real consequences for violating the Board’s Investment and Trading Policy,” Brown wrote in the letter.
Brown is chairman of the Senate Committee on Banking, Housing, and Urban Affairs.
“The American people must be able to trust that the Federal Reserve works for them, and that officials aren’t abusing their positions for personal gain,” Brown added.