'Stock Trading Controversy' Clarida, Fed Vice Chair, Resigns Two Weeks Early

Richard Clarida, Vice Chairman of the Federal Reserve (Fed)
[Photo by Bloomberg]

[Asia Economy Reporter Park Byung-hee] Richard Clarida, Vice Chairman of the U.S. Federal Reserve (Fed), is reported by Bloomberg News on the 10th (local time) to be resigning effective the 14th. This is two weeks earlier than his original term expiration date of the 28th. It is interpreted that this is due to new controversies raised recently regarding Clarida's stock transactions in February 2020.

Vice Chairman Clarida expressed his intention to resign to the Fed on the 7th, and it is known that he also sent a letter to President Joe Biden on the 10th stating his resignation. The Fed officially announced Clarida's resignation on the afternoon of the 10th.

It is known that Vice Chairman Clarida sold stocks worth at least over one million dollars in February 2020. The timing of Clarida's stock sale was just before February 28, 2020, when Fed Chairman Jerome Powell indicated a rate cut by stating, "We will act appropriately to support the economy."

When the controversy regarding last year's stock transactions was first raised, Vice Chairman Clarida stated that the stock sale date was February 27. However, last month, Clarida revised the sale date to the 24th, three days earlier. The controversy over the stock sale resurfaced as the media revealed last week that he had changed the sale date.

It was confirmed that the stocks Clarida sold during the three days following the 24th, the date he disclosed, declined in value. However, no additional misconduct related to Clarida's stock transactions has been reported.

The Fed stated, "The change in the stock sale date by Vice Chairman Clarida was an unintentional mistake," and "We believe that Vice Chairman Clarida complied with conflict of interest regulations."

Since Vice Chairman Clarida was nearing the end of his term, his resignation is not expected to affect Fed policies. President Biden has nominated Fed Governor Lael Brainard as Clarida's successor, and the U.S. Senate is scheduled to hold a confirmation hearing for Brainard on the 13th.

However, as allegations related to stock transactions by Fed officials continue, controversy over the Fed's lax ethical regulations is expected to persist. Following the stock transaction issues raised at the end of last year, Eric Rosengren, President of the Boston Federal Reserve Bank, and Robert Kaplan, President of the Dallas Federal Reserve Bank, resigned.

This content was produced with the assistance of AI translation services.