Fed changes policy after another boss gets caught blabbing
It isn’t often that I fail to take credit for something I got right.
But I just noticed that the Federal Reserve issued a new policy prohibiting Fed officials from talking with the public soon after I wrote a series of columns about New York Fed chief William Dudley playing fast and loose with the old rules.
I’m mentioning this because the head of the Richmond, Va., Fed got jettisoned from his job earlier this month for having an inappropriate phone conversation with a Wall Street analyst.
In a column I wrote last week I complained that nobody cared when I caught Dudley having an “informal” dinner meeting in 2009 with a friend from Goldman Sachs during the so-called “blackout periods” before Fed policy meetings.
Well, it turns out that the Fed apparently did care. And just months after my first column about Dudley’s transgressions (which I started writing about on Jan. 6, 2011), the Fed in Washington issued (on June 22, 2011) a new “FOMC Policy on External Communications of Committee Participants.”
Part of that statement says that Fed Open Market Committee “participants will strive to ensure that their contacts with members of the public do not provide any profit-making person or organization … They will consider this principle carefully and rigorously in scheduling meetings with anyone who might benefit financially from apparently exclusive contact with Fed officials …”