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Regional Fed Presidents Disclose Holdings

In response to media requests, and as part of the Federal Reserve’sefforts to be more transparent, the twelve presidents of the regional Federal Reserve Banks have provided financial disclosures that are available, upon request, from the institutions they run.

Richard W. Fisher, president of the Federal Bank of Dallas
Jean Ayissi | AFP | Getty Images
Richard W. Fisher, president of the Federal Bank of Dallas

The disclosures cover each year the bankers have served as president of their respective banks up to 2010. The findings show some with millions in retirement funds and other investments, others with less.

In general the nation’s top bankers favor blue chip stocks, tax free money market and bond funds.

At least one, Dallas Federal Reserve President Richard Fisher, listed three properties worth more than a million dollars each.

Given each disclosure was done in accordance with each regional bank’s ethics guidelines, the disclosures are not uniform and none of them provided a total figure for the presidents’ net worth.

Among the disclosures, in 2007 it was found a discretionary account managed by Merrill Lynch for Atlanta Fed President Dennis Lockhart had not complied with Federal Reserve restrictions on managed accounts.

Atlanta Federal Reserve President and CEO Dennis Lockhart
Source: frbatlanta.org
Atlanta Federal Reserve President and CEO Dennis Lockhart

Lockhart reminded the managers about the restrictions, but in 2008 the managers invested his money in bank and bank holding companies and executed trades on his behalf during blackout periods. Both are prohibited under the Fed’s guidelines.

Lockhart informed the Atlanta Fed’s ethics committee of these transactions in 2009 when he was preparing his financial disclosure submission, closed his accounts and moved them to another manager and sold the bank and bank holding company stocks.

The ethics panel reviewed all the transactions and concluded Lockhart had not done anything that violated federal ethics laws.

The heftiest disclosure came courtesy of New York Fed President William Dudley. Weighing in at 197 pages it discusses a waiver granted to the former Goldman Sachs economist in 2008 for his holdings in the insurer AIG and General Electric .

William C. Dudley, President and CEO of the Federal Reserve Bank of New York
Stan Honda | AFP | Getty Images
William C. Dudley, President and CEO of the Federal Reserve Bank of New York

At the time, Dudley was working for the NY Fed’s Markets Group which made loans to both these firms. Because Dudley was in possession of material, non-public information about the firms, the bank decided he should not sell his holdings in these companies. Once he became president of the New York Fed, he was instructed to sell both at a fixed date.

Dudley, whose holdings include a wide range of index funds, CDs and over a million dollars in the Federal Reserve’s retirement fund, was also granted a permanent waiver for the more than one million dollars he owned in Treasury Inflation Protected Securities, or TIPS.

As a Vice Chairman of the Federal Open Market Committee, Dudley participates in interest rate decisions that directly impact these investments. The permanent waiver was granted in 2009, after a review of the Fed’s investment guidelines for its employee retirement plans.

These disclosures are similar to those required by federal law of the central banks governors.

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