Warren, Powell’s Biggest Foe, Not Letting Up on Ethics Push
Warren, Powell’s Biggest Foe, Not Letting Up on Ethics Push
(Bloomberg) -- Senator Elizabeth Warren plans to keep pressing Federal Reserve Chairman Jerome Powell over his announced changes to ethics rules on securities trading by Fed officials as she continued to call for new leadership at the U.S. central bank.
“The scandal at the Fed has drawn attention to this area and the Fed is now scrambling to try and get ahead of it,” Warren, a Massachusetts Democrat said Thursday evening in an interview with Bloomberg News. “But the bottom line is that we still need to see a lot more from the Fed.”
Warren said there’s still a lot more to know about “what happened on Jay Powell’s watch and why it happened,” including from investigations by an inspector general and the Securities and Exchange Commission.
“I’m very concerned about his leadership,” she said. “How could anybody at the Fed have thought that the trades in individual stocks that we know about are O.K.? It’s the chair who sets the tone.”
Powell, earlier Thursday, announced that the bank would ban top officials from buying individual stocks and bonds as well as limit active trading. The action came after after an embarrassing episode followed by resignations of two officials muddied Powell’s path to renomination.
Warren said she also wants to ensure the new rules, which include bans on buying individual stocks and bonds as well as strengthened disclosure requirements, “have real teeth and they aren’t watered down.”
“We know these are rough guidelines; they will have to be fleshed out,” she said of Powell’s announcement. “I’ll be watching to make sure the chair holds to what he released today.”
Warren, like Banking Chairman Sherrod Brown, an Ohio Democrat, also wants a broader law prohibiting stock trading by senior officials, members of Congress and so on.
Warren came out against Powell’s renomination for a second term as chair last month, calling him “a dangerous man” because of his backing of deregulation she said made a 2008-style meltdown and taxpayer bailouts more likely.
Warren said Thursday she still wants internal ethics guidelines that, according to the New York Times, the Fed issued internally in March 2020, and disclosure of all trades made up until now.
“We need the independent IG and SEC investigations completed promptly and without any Fed interference,” she said. “This is a big deal. The American people have to be able to trust government officials.”
Warren said she hasn’t looked at all of the details surrounding Powell’s own trades, including a sale exceeding $1 million in a broad stock fund which some outside groups and critics have sought to use as ammunition against his renomination. Earlier Thursday she told reporters that officials should be limited to investments like blind trusts or broad index funds.
But she pointed out that she’s made her position opposing Powell clear -- particularly because of his actions on deregulation.
“I don’t think he’s a risk worth taking,” she said.
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