Eric Rosengren. Photo courtesy of the Federal Reserve Bank of Boston
The president of the Federal Reserve Bank of Boston, Eric Rosengren, will sell all individual stocks he owns in the coming weeks after financial disclosures revealed that he had actively traded in real estate investment trusts during the pandemic.
Rosengren said in a statement yesterday that he had complied with the Federal Reserve’s ethics rules when making personal saving and investment transactions. But he added that he had “decided to address even the appearance of any conflict of interest.”
“I will sell the individual stocks I own by September 30, and reinvest the proceeds in diversified indexed funds or cash savings,” Rosengren said in the statement. “Further, there will be no trading in these accounts as long I am serving as president of the Boston Fed.”
The 12 regional Fed banks recently released their presidents’ 2020 financial disclosures. Bloomberg reported this week that Rosengren in 2020 had investments in four REITs, including one in which he bought and sold shares, and pointed out concerns raised by Rosengren during the pandemic about commercial real estate, as well as his position that the Fed should start scaling back purchases of mortgage-backed securities.
The Wall Street Journal had reported that another Fed president, Robert Kaplan of the Dallas Fed, had made multiple stock trades of more than $1 million in 2020. Kaplan also released a statement yesterday saying he would sell individual stocks he owns by the end of September.
Rosengren said the steps he is taking were important to avoid the appearance of a conflict of interest.
“For context, I made some personal investment decisions last year that were permissible under Fed ethics rules for asset types and timeframes for transactions,” Rosengren said in the statement. “Regrettably, the appearance of such permissible personal investment decisions has generated some questions, so I have made the decision to divest these assets to underscore my commitment to Fed ethics guidelines. It is extremely important to me to avoid even the appearance of a conflict of interest, and I believe these steps will achieve that.”
