Federal Reserve Investigates Bostic Trading Post-Blackout Period

Atlanta Federal Reserve Bank Governor Raphael W. Bostic speaking at the European Financial Forum event in Dublin, Ireland on February 13, 2019. Clodagh Kilcoyne | The Reuters Fed is examining the trading of Central Bank Atlanta Regional Governor Rafael Bostic for a limited time. After revelations over the past few years that Bostik’s investment activities have violated Fed regulations and blackouts in several cases, the central bank said the Office of the Inspector General will review the questionable period further. “Fed Chairman Jerome Powell has requested the Office of the Federal Reserve Inspector General to begin an independent review of President Bostic’s financial disclosures,” a Fed spokesperson said. “We look forward to the results of their work and will accept and take appropriate action based on their findings.” Before the early retirements of two regional governors, Boston’s Eric Rosengren and Dallas’ Robert Kaplan, reveals that several officials were involved in the investment move as the Fed took steps to support the market. There were also revelations that Powell was involved. A deal with former Vice-Chairman Richard Clarida was also problematic, but the Inspector General clarified the fault of both officials. This controversy has also led to a revised policy that severely limits what Fed officials can do. In his case, the breach was unintentional and resulted from reliance on a third-party manager to handle his investments. He said he and his investment advisor had invested in an account that he could not direct. In a statement released along with the revised disclosure form, Bostik apologized for the controversy. “This office,” he said, “I want to be clear. I had no intention of knowingly authorizing or completing financial transactions based on non-public information or concealing or circumventing our transparent and responsible reporting obligations.” It sets interest rates using the federal funds rate, which is closely correlated with the federal funds rate New regulations prohibit senior government officials from holding individual stocks, bonds and cryptocurrencies along with other assets Atlanta Federal Reserve (Fed) “These rule changes have exposed Bostik’s reporting mistakes by requiring a review by the Atlanta region and key DC operations departments of the Fed,” he said. In a statement. Controversy over the investment move by Fed officials came at a time when policymakers were considering taking action early in the COVID-19 pandemic, according to a report first published in the Wall Street Journal. It was sparked after reports of its involvement in an aggressive bond-buying program that cut interest rates to near zero and added nearly $5 trillion to the central bank’s balance sheet Atlanta’s systems and processes to maintain public confidence It’s about completing the mission,” said Bostik.
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