The Federal Reserve did not disclose updated financial information for two former regional bank presidents whose trading ignited a scandal at the central bank, even though they held important monetary policy roles for most of 2021 — the year covered by a fresh set of disclosures released on Friday.

Robert S. Kaplan, the former president of the Federal Reserve Bank of Dallas, and Eric Rosengren, formerly head of the Boston Fed, both stepped down in September as the trading scandal story unfolded. Mr. Kaplan said the focus on the trades was distracting from the Fed’s work, and Mr. Rosengren cited health issues.

Though both sat in their policy roles for most of last year, when the Fed was debating market-critical topics like how to handle the onset of rapid inflation and when to pull back economic support, neither of their reserve banks published fresh disclosures to cover the end of their tenures. Instead, the banks published disclosures for the interim presidents who succeeded Mr. Kaplan and Mr. Rosengren.

“The rules in place when President Kaplan departed did not require him to file an updated financial disclosure upon his departure,” James Hoard, a representative for the Dallas Fed, wrote in an email.

A representative for the Boston Fed offered a similar explanation.

Mr. Kaplan traded in individual stocks and complicated financial instruments in 2020, and Mr. Rosengren traded in real-estate-tied securities, which could have been influenced by Fed policy. A colleague at the Fed’s board in Washington, Richard H. Clarida, moved his money out of stocks and back into them in quick succession on the eve of a major Fed release that could have boosted stock prices. The central bank drastically overhauled its ethics framework after the public outcry that erupted in response to the three officials’ trades.

But the fact that the world may never know what the two presidents traded during their final months in office highlights the peculiarities of the Fed’s structure — and how it can limit accountability. Mr. Clarida was required to file a financial disclosure once he stepped down, as a member of the presidentially appointed and publicly accountable board.

But those federal rules do not apply to regional Fed banks.

The 12 reserve banks are structured as private institutions, and they are not subject to the transparency rules covering government officials, like the Freedom of Information Act (though many say they adhere to it in spirit). Until the Fed’s ethics reform adopted early this year, which mandated that presidents post financial transactions publicly within 30 days, they had looser oversight than many other influential government officials.

Even the Fed board is somewhat limited in its ability to police the regional presidents.

“We don’t have that information at the board and I asked the inspector general to do an investigation, and that is out of my hands,” Jerome H. Powell, the Fed chair, said early this year when asked for more details about Mr. Kaplan’s 2020 trades and their timing. “I play no role in it, and I seek to play no role in it.”

The investigation into the 2020 Fed trading that Mr. Powell referred to, which the Fed’s independent watchdog is carrying out, is continuing.



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