Richmond Federal Reserve President Jeffrey Lacker left the USA central bank on Tuesday after saying a conversation he had with a Wall Street analyst in 2012 may have disclosed confidential information about Fed policy options.
The fed official revealed that in a phone conversation with an analyst working for Medley Global Advisors, which publishes macroeconomic policy intelligence for institutions such as hedge funds and asset managers, he happened to flout the confidentiality policy with respect to the proceedings at the September 2012 FOMC meeting. The analyst asked about a non-public detail about policy options. He cites, with a painful degree of exactitude, his "failure to decline comment on the information could have been taken by the Analyst, in the context of the conversation, as an acknowledgment or confirmation of the information".
During his conversation with the analyst at Medley Global Advisors, Lacker said he didn't decline to comment when non-public details of the FOMC meeting came up, indicating he wasn't the original source of the leak. Then in March 2016, he was reappointed to another 5-year term by the Federal Reserve Board. As a result, even the smallest rumors can potentially move financial markets. They process payments and help regulate banks, while their presidents take turns as members of the Fed committee that sets interest rates.
The incident was the subject of a Fed internal probe and has prompted investigation by agencies including the Department of Justice and the Federal Reserve Board's Office of Inspector General, as well as repeated questions from members of Congress.
In 2015, I was interviewed again as part of a separate investigation conducted by the United States Attorney's Office for the Southern District of NY, the Office of the Inspector General of the Federal Reserve Board, the Federal Bureau of Investigation, and the U.S. Commodity Futures Trading Commission. "We expect every employee to comply with all relevant policies and procedures, as well as our standards of conduct", the Richmond Fed said in a statement confirming Lacker's departure. His lawyer said no charges are forthcoming.
Mr Lacker had previously announced plans to leave in October, but said in a statement that "in light of these matters I have decided to make my departure from the Federal Reserve effective today". Some Fed watchers had speculated that the Trump administration might be considering Lacker for a position as the vice chair of supervision, a position that will be vacated with the resignation of Fed governor Daniel Tarullo in early April.