Fed chairmen Kaplan and Rosengren to sell individual stocks to address ethics concerns

Regional Federal Reserve Chairmen Robert Kaplan and Eric Rosengren said on Thursday they would sell individual stocks due to ethics concerns about trading in 2020.

Fed officials will sell all of their shares by September 30 and invest the proceeds in passive investments, they said in statements released Thursday.

“Although my personal savings and investment transactions comply with the Federal Reserve’s ethical guidelines, I have decided to address even the appearance of any conflict of interest by taking the following steps,” said Rosengren, Chairman of the Boston Fed.

The announcements come after Fed officials came under intense scrutiny over investment activity in a year when central bank actions supported financial markets during the Covid pandemic.

A financial disclosure form from Dallas Fed Chairman Kaplan raised eyebrows this week by revealing a number of individual stock trades last year, including Apple, Amazon and Delta Airlines. Kaplan owned a total of 32 individual stocks, funds or alternative assets, of which 27 were valued at over $ 1 million at the end of 2020, according to the disclosure.

The form was first reported by the Wall Street Journal.

Rosengren and Kaplan are chairmen of two of the Fed’s 12 regional banks that span across the country. The presidents of the regional banks sit in turn on the Federal Open Market Committee, which defines the rate policy.

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