Warren, Reed, Van Hollen Call On Fed Watchdog To Investigate Vice Chair Bowman's Private Wall Street Dinner During Fed's Blackout Period

Warren, Reed, Van Hollen Call On Fed Watchdog To Investigate Vice Chair Bowman's Private Wall Street Dinner During Fed's Blackout Period

Warren, Reed, Van Hollen Call On Fed Watchdog To Investigate Vice Chair Bowman's Private Wall Street Dinner During Fed's Blackout Period

"The FOMC generally prohibits external communications around FOMC meetings to 'reinforce the public's confidence in the transparency and integrity of the monetary policy process.'"

Text of Letter (PDF)

Washington, D.C. - Today, U.S. Senators Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, Jack Reed (D-RI), and Chris Van Hollen (D-MD) sent a letter to Michael Horowitz, the Inspector General at the Board of Governors of the Federal Reserve System, calling for an investigation into Federal Reserve Vice Chair for Supervision Michelle Bowman's recent decision to speak and answer questions at a closed-door dinner on Wall Street during the Federal Open Market Committee's (FOMC) "blackout period."

According to recent reporting from the Wall Street Journal, Vice Chair Bowman attended an "invitation-only, private dinner thatBank of America hosted for clients" immediately following the FOMC's first monetary policy meeting led by the newly confirmed Chair, Kevin Warsh, and while the blackout period was in effect.

"During the blackout period, FOMC officials are required to 'refrain from expressing their views about macroeconomic developments or monetary policy issues,' including in 'any meeting or conversation with any individual, firm, or organization who could profit financially from acquiring that information,'" wrote the Banking Committee members.

"Bowman has maintained that she did not share her views on monetary policy at the dinner, (but) public reporting indicates she discussed a range of Federal Reserve monetary policy topics," continued the Senators. "She also reportedly expressed her views about the Federal Reserve's Standing Repo Facility, which the FOMC established 'to support the effective implementation and transmission of monetary policy.'"

The Senators highlighted concerns about the meeting from a past member of the FOMC : "Former President of the Federal Reserve Bank of Philadelphia Patrick Harker, who was previously subject to these restrictions, reacted to reports of Bowman's conduct: 'If Bank of America is putting their dinner on, it's giving them a commercial advantage, right? So we were not allowed to do those.'"

The Senators continued: "The top White House ethics official during the George W. Bush Administration argued that "(a) bank offering its clients a private audience with an official who oversees its supervision is the kind of exclusive access the Fed's policies should guard against."

The Senators concluded: "The Fed has been plagued by ethics scandals in recent years involving at least six senior Fed officials. Fed officials must be held to the highest ethical standards."

The Banking Committee members requested that Inspector General Horowitz open an investigation into whether the Vice Chair's actions violated the FOMC's restrictions on external communications during blackout periods or any other statutes, rules, regulations, policies, or procedures.

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