Gillibrand And The Fed, Again

January 11, 2022

WASHINGTON, D.C. – Ahead of the Senate Banking Committee’s confirmation hearing for Federal Reserve Chair Jerome Powell, U.S. Senator Kirsten Gillibrand is urging Powell to address the Federal Reserve’s trading rules for Federal Reserve officials, policymakers and senior staff. While the Federal Reserve announced it would issue a new set of rules that purports to “prohibit the purchase of individual securities, restrict active trading, and increase the timeliness of reporting and public disclosure by Federal Reserve policymakers and senior staff,” the recent resignation of the Federal Reserve’s vice chair, who faced questions about trades made in 2020, raises the urgency about the need to codify these rules into law. In October 2021, Gillibrand introduced the Ban Conflicted Trading at the Fed Act, legislation to prohibit Federal Reserve officials from trading individual stocks and ensure Americans can trust that the Federal Reserve is acting in the best interest of all Americans. The legislation was introduced with Senators Sherrod Brown (D-OH), Jeff Merkley (D-OR) and Raphael Warnock (D-GA), and Senator Jon Ossoff (D-GA) is also a cosponsor.

“Serious and important questions remain about Federal Reserve officials trading stocks while setting U.S. economic policy,” said Senator Gillibrand. “While Federal Reserve Chair Powell has previously announced that rules would be implemented to restrict trading by Federal Reserve policymakers and senior staff, it is clear that my legislation, the Ban Conflicted Trading at the Fed Act, is necessary. The bill would ban Federal Reserve officials and leadership from trading stocks and penalizes them if they do so. Powell must answer questions about the stock trading by Fed officials and proposed legislation to address this problem.”

Senator Gillibrand is a leading advocate for increasing transparency and accountability in Congress. Gillibrand supports banning members of Congress from owning individual stocks and in 2020, Gillibrand, lead sponsor and author of the original STOCK Act, announced the STOCK Act 2.0 with Representative Katie Porter (D-CA). This bicameral legislation would expand the STOCK Act by strengthening disclosure rules and preventing individuals in trusted positions of public service — including members of Congress, their families, and their staffs — from using their access for self-enrichment. The original STOCK Act bars a member of Congress, the president, vice president and high level staff from engaging in insider trading or otherwise using nonpublic information for their own benefit. It also included important updates to financial transparency, by requiring these high ranking government officials to expeditiously disclose financial transactions to the public.