FOIA request reveals financial holdings of Fed presidents

The presidents of the 12 regional Federal Reserve banks on January 31 disclosed their financial records as part of a Freedom of Information Act request that was filed by Bloomberg news.

CentralBanking.com obtained the documents outlining the financial holdings of William Dudley from the Federal Reserve Bank of New York; Charles Plosser from the Federal Reserve Bank of Philadelphia; and Sandra Pianalto, who heads the Federal Reserve Bank of Cleveland.

The documents reveal that Dudley received a temporary waiver for investments he held during the financial crisis in 2008 that represented a potential conflict interest. The waiver related to his holdings in American International Group and General Electric, two organisations that received emergency funding from the central bank through the discount window during the crisis. In 2008, Dudley served as the executive vice-president of the Markets Group at the New York Fed, where he managed the System Open Market Account for the Federal Open Market Committee. The documents show that while Dudley's holdings in AIG amounted to just $1,200 as of September 18, 2008, his interest in General Electric amounted to $106,830.

At the time, Thomas Baxter, general counsel at the New York Fed, said that Dudley's investments in GE and AIG, which accounted for less than 5% of his total financial holdings, were not so substantial as to be deemed likely to affect the "integrity of the services" which the central bank may expect from him. Dudley was granted a temporary waiver by the board of directors at the New York Fed and asked to divest himself of the otherwise prohibited financial interests "as quickly as possible". After he was appointed as president of the New York Fed, Dudley also received a waiver related to more than $1 million worth of investments in Treasury Inflation Protected Securities.

The documents from the Cleveland Fed show that Pianalto also held investments in General Electric, but that a waiver was not requested. Pianalto also held shares in Allianz and Wachovia, two banks, and has a mortgage on a property in Delaware worth more than $50,000. Documents disclosed by the Philadelphia Fed show that Plosser held a wide range of investments in money market funds such as Fidelity, American EuroPacific, Schwab and Vanguard. The forms also show that Plosser has taken out a mortgage on a vacation home valued at between $50,000 and $150,000.

The regional bank Fed heads were asked to disclose their investments in response to a request under the Freedom of Information Act. The Fed banks are not held to the same level of public scrutiny as the board of governors in Washington, and do not routinely make personal financial information public. However, the New York Fed said it had disclosed the forms and related documents filed by their current presidents with Federal Reserve Bank ethics officers "to promote transparency".