Federal Reserve Vice Chairman Richard Clarida announced Monday that he would step down from his position two weeks earlier than he originally planned because he failed to disclose details of some 2020 financial transactions, multiple sources reported.
The central bank announced that Clarida, whose four-year term was set to end on Jan. 31, will instead step down on Jan. 14. Clarida amended financial disclosures regarding previous trades where he sold stock at the onset of the COVID-19 pandemic, The New York Times reported.
“This highlights the need for greater disclosure,” Martin Schmalz, a professor of finance at Oxford University, told Daily Caller News Foundation. “And a glaring lack of disclosure of personal conflicts of interest by some of the most powerful people in the profession. So Clarida is just one example.”
Clarida received criticism after reports showed him making investments in February 2020, one day before Federal Reserve chairman Jerome Powell announced that the bank was ready to use stimulus to help the struggling economy, the NYT reported at the time.
Clarida’s amended disclosures show that he sold shares of the same fund in which he invested after the market plummeted during the onset of the COVID-19 pandemic, according to the NYT.
“Rich’s contributions to our monetary policy deliberations, and his leadership of the Fed’s first-ever public review of our monetary policy framework, will leave a lasting impact in the field of central banking,” Powell said in the Fed’s announcement Monday. “I will miss his wise counsel and vital insight.”
President Joe Biden nominated Powell for a second term as the chairman of the central bank in November 2021, and Powell’s hearing in front of the Senate Banking Committee is scheduled for Jan. 11.
Biden also announced in November that he would nominate Leal Brainard, who was also rumored to be in the running to lead the Treasury Department before the nomination of Janet Yellen, to be the bank’s vice chair.
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