Richard Clarida, vice president of the Federal Reserve, resigned after being under scrutiny for the deals he made at the start of the pandemic.
The central bank announced Monday that Clarida, whose four-year term was due to expire at the end of the month, will leave her position on Friday.
Clarida’s resignation followed amended changes came to light last week, which showed it was more active in the financial markets in 2020 than it first announced.
His departure marks the third major resignation of a senior Fed official in recent months due to trading activities. Eric Rosengren and Robert Kaplan, who ran two regional bank branches, resigned in September.
The trade scandal first erupted in September when it was revealed that Rosengren and Kaplan frequently bought and sold individual stocks last year, while also holding stakes in several investment funds.
Clarida, meanwhile, shifted between $ 1 million and $ 5 million from the bond fund to the equity fund just days before the Fed announced urgent measures to boost financial markets as the Covid-19 crisis intensified.
Last week, amended announcements came to light revealing that, three days before the already reported transactions, Clarida sold between $ 1 million and $ 5 million in shares from the same equity fund. The Fed vice president said his failure to report those trades was the result of “unintentional mistakes.”
Previously unreported trades have called into question the Fed’s earlier explanation that Clarida’s transactions were part of a “pre-planned rebalance.”
In her resignation letter to President Joe Biden on Monday, Clarida, who has been in that role since 2018, made no mention of the controversy over trading.
Ethics experts have called on the Fed’s independent government supervisor to expand his own an ongoing investigation into the legality of the trade recently discovered by Clarida. It is already being examined whether other transactions by top officials have met ethical standards and the law.
In response to the scandal, the Fed is in October repaired trading rules for senior staff, introducing a total ban on any purchase of individual shares and banning them from many other investments.
In his letter to Biden, Clarida said it was “an extraordinary honor and a huge privilege” to work in the Fed that he was “proud” to have had the opportunity to help shape central bank policy.
In response to Clarida’s resignation, Fed Chairman Jay Powell said: “Rich’s contribution to our monetary policy considerations. . . will leave a lasting impact in the area of central banking. ”