Federal Reserve Vice Chair Richard Clarida said Monday that he will step down on Friday, the third Fed official to resign after a trading scandal at the central bank that involved potential conflicts of interest.
The announcement followed new revelations around Clarida’s trading in a stock fund in February 2020, when the coronavirus threatened to upend the global economy and the Fed was discussing extraordinary rescue measures.
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The New York Times last week reported that Clarida amended his financial disclosures in late December to show that he had sold and then repurchased shares in the stock fund within a matter of days. Previously, Clarida had reported only the purchases, which came a day before Chair Jerome Powell said the Fed was prepared to support markets and the economy. The Fed had characterized the purchase as a simple portfolio rebalancing — an explanation that was undercut by the revelation of the initial sale.
We reported in October that Clarida made some big bets on stocks and bonds just before the FED’s pandemic statement.