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Fed to ban policymakers from owning individual stocks (cnbc.com)

578 points by awb · 1796 days ago · 217 comments on HN

Article summary

The Federal Reserve has announced new rules banning top officials from owning individual stocks and bonds, and restricting their trading activities. The move comes after a controversy over whether central bank officials should be able to trade while their policies can move markets. Officials will be restricted to owning mutual funds, which they must hold for at least a year, and will need permission to buy or sell. The new rules aim to assure the public that Fed officials maintain a single-minded focus on the public mission of the Federal Reserve.

Main themes

  • Federal Reserve trading rules
  • insider trading
  • conflicts of interest
  • government accountability
  • corruption
  • regulation
  • big government vs small government
  • US-China comparison

What commenters say

  • The SEC should take similar actions against elected officials to prevent insider trading and conflicts of interest.
  • Congress is unlikely to police itself and introduce stricter rules on trading, despite some calls for greater transparency.
  • Making the trades of congress people public as soon as they are placed could be a more effective way to prevent corruption than banning certain types of trades.
  • Robust controls and systems are needed to detect and prevent corruption, rather than simply increasing salaries or relying on self-regulation.
  • The concentration of power in government and large corporations can lead to corruption and abuse, and more needs to be done to hold them accountable.
  • Some argue that big government is necessary to compete on the global stage, while others believe it leads to more corruption and that smaller businesses and less regulation would be more effective.
  • The comparison between the US and Chinese systems of government is complex, with some arguing that the US is also authoritarian, while others see China as a more extreme case.
  • The salary of policymakers is not the main issue, but rather the lack of effective controls and accountability mechanisms to prevent corruption and conflicts of interest.