Richard Clarida will resign on Friday even though his term expires on Jan. 31.
Federal Reserve Vice Chairman Richard Clarida said on Monday he would resign on Friday from the central bank even though his term from the board was scheduled to expire on Jan. 31.
He is the third Federal Reserve official to resign over controversial financial transactions.
An investigation has been launched by the Fed’s inspector general on whether Fed officials had insider information of economic conditions and were trading stocks. Robert Kaplan and Eric Rosengren, two Fed regional bank presidents, have also resigned due to questions about stock trading actions during the pandemic.
The financial transactions that Clarida conducted at the beginning of the global pandemic have also faced scrutiny..
Last week the New York Times reported that he did not disclose the full extent of the trading initially. The stock trades were corrected and disclosed in December.
Clarida had sold shares in three stock funds on Feb. 24, 2020 and repurchased one of them on Feb. 27 for a similar amount. During those three days, stocks declined as more news about the spread of the coronavirus emerged.
Clarida said his three purchases on Feb. 27 were part of a rebalancing of his portfolo that had been already set up.
A Fed ethics officer recently cleared those transactions, saying in a letter that Clarida was in compliance with “applicable laws and regulations governing conflicts of interest.”
Fed Chairman Jerome Powell helped secure Clarida’s appointment from former President Donald Trump in April 2018. Clarida had been an economics professor at Columbia University and was a former economist at bond behemoth Pacific Investment Management Co.
“Rich’s contributions to our monetary policy deliberations, and his leadership of the Fed’s first-ever public review of our monetary policy framework, will leave a lasting impact in the field of central banking,” said Chair Jerome H. Powell in a statement. “I will miss his wise counsel and vital insights.”
Clarida played a large role in overseeing the framework review of the Fed in 2019. The result was how the central bank decides its interest rate policy.
The announcement of his resignation was made by the Fed. Powell will testify at his confirmation hearing in the Senate on Tuesday.
