Congress Should Probe Fed Officials, Ban Trading, Ossoff Says
(Bloomberg) -- Congress should conduct its own investigation into securities trades by Federal Reserve officials and consider legislation banning such transactions, Senator Jon Ossoff, a member of the Banking Committee, said.
“At minimum, having these senior leaders of the Federal Reserve personally trading stocks, around the time of major monetary policy announcements, and just in advancement of major monetary announcements, significantly undermines public confidence in the Fed, and it may be worse than that,” the Georgia Democrat said in an interview for Bloomberg Television’s “Balance of Power With David Westin.” “Congress does need to look at it, because it may be a serious ethical issue and it’s our responsibility to oversee.”
Actions by Fed officials have come under greater scrutiny as a result of revelations about trading activity by some senior officials last year as the central bank fought to shelter the U.S. economy from Covid-19.
Massachusetts Senator Elizabeth Warren, who also sits on the Banking panel, has called for the Securities and Exchange Commission to investigate whether the transactions violated insider trading rules. She said Tuesday she “hopes” there would be hearings, but wouldn’t confirm whether there has been any discussions.
Ossoff and Warren also said they support a broader ban on stock trading by members of Congress, administration officials and members of the Fed.
“We may need to enact legislation to make the case that Fed Board of Governors and Open Market Committee should not be permitted to trade stocks,” Ossoff said.
Proposals to ban stock trading by members of Congress have come up in the past, including earlier this year, and received bipartisan support. But the proposals have yet to advance.
Republican Senator John Kennedy of Louisiana, who also is on the Banking panel, said he would support a blanket ban on trading by top government officials.
“In terms on individual stock trades, I would support a prohibition against all of us,” Kennedy said. “On the one hand that’s probably unfair, but on the other hand you eliminate the perception that you traded on some information that you might have gained from your job and it’s one of the prices you pay for public service.”
However, Senator Pat Toomey of Pennsylvania, the ranking Republican on the Banking Committee, said he is not “very enthusiastic” about stock trading bans.
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