WASHINGTON - The Federal Reserve's inspector general has cleared former Dallas Fed President Robert Kaplan and former Boston Fed President Eric Rosengren of legal wrongdoing related to their trading activities during the central bank's market stabilization efforts in 2020. The investigation concluded without charges, but the scrutiny over their actions contributed to their retirements and prompted a revision of ethics rules within the Federal Reserve.
The trading activities of Kaplan and Rosengren came under intense public scrutiny as they occurred while the Federal Reserve was implementing measures to stabilize financial markets during a period of economic uncertainty. The controversy surrounding their actions led to a loss of public confidence, which ultimately resulted in both officials retiring from their positions.
In response to the situation and the subsequent public backlash, the Federal Reserve has since implemented changes to its ethics rules. These changes are designed to prevent such conflicts of interest and bolster public trust in the central bank's integrity and commitment to transparency.
The clearing of Kaplan and Rosengren by the inspector general closes a chapter on an issue that had raised concerns over the conduct of Federal Reserve officials during times of crisis management. The Federal Reserve's efforts to amend its ethics policies reflect an ongoing commitment to uphold the highest standards of conduct for its officials and to maintain the confidence of the public.
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