The Federal Reserve is looking into trades that Raphael Bostic made during restricted periods.
In the wake of disclosures that there were multiple incidents over the past several years in which Bostic's investment activity violated Fed restrictions, the central bank said its Office of Inspector General would be looking into the matter further. Bostic misstated his assets.
An independent review of President Bostic's financial disclosures has been requested by Fed Chair Powell. We will accept and take appropriate actions based on the results of their work.
The issue of trading by Fed officials has been a hot-button topic. The retirements of two regional presidents at a time when the Fed was taking steps to support markets preceded disclosures that multiple officials had been involved in investment moves.
Powell had been involved in trades in the 2020s. The inspector general cleared both Richard Clarida and the other officials of wrongdoing.
The revised policy restricted the moves Fed officials could make.
Bostic said that the violations were not intentional because he relied on a third-party manager to handle his investments. Neither he nor his advisor can direct his investments.
Bostic issued a statement apologizing for the controversy.
He said that he understands and abides by every obligation of the office. At no time did I knowingly authorize or complete a financial transaction based on nonpublic information, or sidestep my obligations of transparent and accountable reporting.
In his statement, he noted that his holdings of Treasurys in 2021 exceeded limits outlined in Fed guidelines. The fed funds rate is used by the Fed to set interest rates.
The Fed put restrictions on what its members can do in February. Top officials can't hold individual stocks, bonds, and Cryptocurrencies. The rule changes led to a review of both the Atlanta district and the main D.C. operation.
The Atlanta Fed said in a statement that they will cooperate with the review to make sure it is resolved.
The controversy over the investment moves from Fed officials hit after it was reported that some members had engaged in trading around the time that policymakers were considering taking actions in the early days of the Covid epidemic.
The Fed implemented an aggressive bond-buying program that added $5 trillion to the central bank's balance sheet.
Bostic regretted if his actions raised questions about his standards, behavior, or motivation, the Federal Reserve Bank of Atlanta's systems and processes to maintain the public trust, or the commitment of the Federal Reserve to transparency and accountability.
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