Powell could one-up new Fed ethics rules

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Federal Reserve Chair Jerome Powell attends the House Financial Services Committee hearing on Capitol Hill in Washington, U.S., September 30, 2021. Al Drago/Pool via REUTERS/File Photo

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NEW YORK, Oct 21 (Reuters Breakingviews) - New Federal Reserve ethics rules are a step in the right direction. The U.S. central bank said on Thursday it would ban senior officials from owning individual securities, among other changes – a belated but sensible move. Yet there are simpler ways to ensure perceived conflicts can't arise.

Fed Chair Jerome Powell was under pressure to take action. Two regional bank presidents recently retired early amid a furore over trades in individual stocks. This week, Powell himself was dragged in: He sold a stock index fund holding valued at more than $1 million in October last year, attracting unwanted scrutiny.

The new measures are tougher than before, but also more complicated. For example, they require providing 45 days' notice of sales or purchases and obtaining prior approval. A more straightforward and watertight approach would be to put all holdings in a blind trust. Powell, who is up for re-nomination as Fed chair, could one-up the new rules by going in that direction himself.

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Editing by Richard Beales and Katrina Hamlin

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