Hollis Johnson/Business Insider
- Senate Banking Committee Chairman Sherrod Brown wants to ban Fed officials from owning individual stocks.
- Brown reportedly said Tuesday he'll introduce legislation to get work on the ban underway.
- Fed Presidents Eric Rosengren and Robert Kaplan are stepping down following stock controversies.
- See more stories on Insider's business page.
Sen. Sherrod Brown, chairman of the Senate Banking Committee, said Tuesday he will introduce legislation to ban officials working at the Federal Reserve from owning individual stocks, after controversial equity holdings by two of the central bank's regional presidents came to light.
Brown, a Democrat from Ohio, told Federal Reserve Chairman Jerome Powell of his plan during Powell's appearance at a hearing held by the bank committee on Tuesday, according to Reuters.
Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan in recent weeks have been under fire for stock purchases during the pandemic, with critics raising questions about conflict of interest because of their roles in shaping US monetary policy. On Monday, they said in separate statements they would step down from their positions.
At a Fed meeting last week, Powell said that "no one [at the Fed] is happy" about the situation and announced a fresh review of the ethics rules surrounding stock trades.
Kaplan made million-dollar trades in stocks of companies including Tesla and Amazon, according to a disclosure form provided by his bank that was first reported by The Wall Street Journal. Rosengren reportedly actively traded real estate investment trusts. Kaplan and Rosengren earlier this month apologized and dumped their purchases.
Kaplan said he will leave on Oct. 8 and addressed the controversy in a statement from the Dallas Fed.
"The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy. Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve's execution of that vital work," Kaplan said.
Rosengren said he would resign effective Thursday, citing health issues. Rosengren, whose term would've been up in June 2022, revealed he has a kidney condition and needs dialysis.