Federal Reserve Bank of Richmond President Thomas Barkin poses during a break at a Dallas Fed conference on technology in Dallas, Texas, U.S., May 23, 2019.
Federal Reserve Bank of Richmond President Thomas Barkin poses during a break at a Dallas Fed conference on technology in Dallas, Texas, U.S., May 23, 2019. Reuters / Ann Saphir

Two Federal Reserve presidents sold or plan to sell securities following an ethics scandal last year around the investment activities of two fellow central bankers that led to strict new limits on policymakers' securities portfolios, financial disclosures published Friday show.

Richmond Fed's Thomas Barkin will divest Georgia state bonds and allow his indidivdual corporate bond holdings to mature without reinvesting them, to bring his holdings into compliance with new Fed rules effective this year, his 2021 disclosure shows.

San Francisco Fed's Mary Daly last year sold dozens of securities from an account held jointly with her spouse, her disclosure shows.

The new Fed rules, finalized in February, prohibit policymakers from holding individual bonds or purchasing equity securities, and impose strict disclosure requirements for planned trades.

Fed Chair Jerome Powell ordered an overhaul of the rules after revelations last fall that Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren had actively traded securities in 2020, as the central bank was buying trillions of dollars of Treasuries and mortgage-backed securities to stabilize financial markets.

Within weeks, both had stepped down, though they said their activities were in line with then-current Fed guidelines.

But their activities raised questions over the propriety of policymakers buying and selling securities even while taking part in interest-rate and other decisions that ripple through financial markets and directly affect the value of the stocks and bonds they hold.

Barkin's disclosure showed that at the end of last year he held more than $1 million in state bonds and at least $500,000 of corporate bonds, though the precise value of his divestments was unclear. Daly's forms show she sold 70 different securities at the end of 2021, nearly all of which were valued in the range of $1,001-$50,000; her holdings in one corporate bond fund was given as between $50,001 and $250,000.