New Fed rules clamp down on chatty officials

WASHINGTON Tue Jul 12, 2011 2:57pm EDT

WASHINGTON (Reuters) - The Federal Reserve, in a push to control the often wayward communications of its top officials, issued detailed rules on Tuesday dictating what they can and cannot do.

The Fed -- the U.S. central bank -- has come under fire for speaking with a dissonant voice and sometimes allowing details of its highly market-sensitive policy meetings to leak to the media or former staffers.

"To the fullest extent possible, Committee participants will refrain from describing their personal views about monetary policy in any meeting or conversation with any individual, firm, or organization who could profit financially from acquiring that information," the Fed said in a statement.

Last year, the Fed announced Vice Chair Janet Yellen would chair a subcommittee on communications aimed at clarifying policy on the matter. The report was a result of that effort.

In September 2010, Reuters chronicled a tendency for former employees to get special -- and lucrative -- access in a special report entitled "The Ties That Bind at the Federal Reserve." It can be found at link.reuters.com/xux36p

That article found that individuals such as former Fed board governor Larry Meyer, of Macroeconomic Advisers, were using their access to gain private information and then selling it back to his consulting firms' clients.

The Fed's new rules addressed the issue quite directly.

"Committee participants will strive to ensure that their contacts with members of the public do not provide any profit-making person or organization with a prestige advantage over its competitors," the Fed communique said.

"They will consider this principle carefully and rigorously in scheduling meetings with anyone who might benefit financially from apparently exclusive contacts with Federal Reserve officials and in considering invitations to speak at meetings that are sponsored by profit-making organizations or that are closed to the public and the media."

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