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- American economist
A third Federal Reserve official has resigned following a trading scandal at the US central bank, with vice chair Richard Clarida saying he will step down on Friday.
Monday's 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 measures to counter its impact.
The New York Times last week reported that Clarida amended his financial disclosures last month to show that he had sold and then repurchased shares in the stock fund in a matter of days that month.
Previously, Clarida had just reported the purchases, which came a day before chair Jerome Powell said the Fed was prepared to support markets and the economy.
The Fed had characterised the purchase as a simple portfolio rebalancing -- an explanation that was undercut by the revelation of the initial sale.
Clarida, who has been part of an inner circle of Fed officials close to Powell and known as the "troika," was scheduled to finish his term at the end of this month. Instead, he will finish about two weeks early.
By doing so, he will miss what would have been his final meeting, scheduled for January 25-26.
Clarida began his position in September 2018 after having taught at Columbia University and having worked for 12 years for the investment fund manager PIMCO.
He received deferred bonuses and stock from his work at PIMCO. And when he joined the Fed in 2018, Clarida's financial disclosures, which report assets in a range of values, estimated his wealth at between $US9 million and $US39 million.
Last year, the presidents of two Fed regional banks -- Robert Kaplan of the Dallas Fed and Eric Rosengren of the Boston Fed -- also stepped down after their questionable trading was revealed.
Kaplan had traded at least $US1 million worth of stocks in 22 transactions in 2020.
Rosengren invested in an investment fund that held mortgage-backed securities, similar to what the Fed has bought to try to hold down long-term rates.
All the trades had been made when the Fed was taking extensive steps to shore up financial markets, potentially benefiting Kaplan, Rosengren and Clarida.
After those resignations were announced, Powell unveiled new ethics rules around trading by Fed board members and other top officials.
The rules bar Fed officials from owning individual stocks or bonds and require 45 days' advance notice of any trade.