Public Officials Shouldn’t Be Allowed to Day Trade
The Fed is reviewing its rules on policy makers’ trading activities. It should outlaw their buying and selling of individual stocks.
Not okay.
Source: Bloomberg
The U.S. Federal Reserve will review its rules governing personal investments after two policy makers disclosed transactions that raised both eyebrows and issues of potential impropriety. I’m with Senator Elizabeth Warren in agreeing that the ownership and trading of individual stocks by public officials in such sensitive roles shouldn’t be allowed. In fact, I’m struggling to generate a single argument in favor of letting such potential conflicts of interest arise.
The planned Fed overhaul comes after all 12 regional bank chiefs tendered their annual financial disclosure forms. Dallas Fed President Robert Kaplan revealed he’d bought and sold the iShares Floating-Rate Bond ETF, the value of which is highly sensitive to Fed policy deliberations. Boston Fed chief Eric Rosengren, who has commented on the risks in commercial real estate, disclosed trades in real estate investment trusts.