Kaplan and Rosengren, who were the target of criticism that the Fed was not acting ethically with their investments, announced their resignations within hours.
The two regional heads of the Fed are retiring after the embarrassing exposure of stock trading as the US central bank struggled with Covid-19. In this unprecedented development in the Fed’s more than 100-year history, Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan announced their plans to step down separately on Monday. Rosengren will leave office this week and Kaplan on October 8.
“Unfortunately, the recent focus on my financial disclosure risks creating a distraction for the Fed to carry out its vital mandate,” Kaplan said in an emailed statement from the Dallas Fed. That’s why I decided to retire,” he said.
On the other hand, Rosengren said that he decided to retire early for health reasons and has been eligible for a kidney transplant since June 2020.
They were Criticized for their Personal Portfolios
Both Kaplan and Rosengren have faced criticism for the past few weeks after their recent 2020 financial statements showed they held and traded financial assets while the Fed actively supported markets during the pandemic.
The financial situation statements of Fed chairmen brought widespread criticism of possible conflicts of interest.
Kaplan, who has been head of the Dallas Fed for six years, previously held senior positions at Goldman Sachs Group Inc. and traded over $1 million several times each year.
Both Fed chairmen announced earlier this month that they would sell all their individual stock holdings by September 30, despite not acting against the Fed’s rules and morals.
The financial disclosures prompted Fed Chairman Jerome Powell to announce that Fed employees will have a new look at the central bank’s senior officials’ internal ethics regarding their financial assets and operations.