WASHINGTON (Reuters) -Two Federal Reserve officials that came under scrutiny for investment trades they made last year announced their retirements on Monday.

Dallas Fed Bank President Robert Kaplan said on Monday afternoon that he will retire on Oct. 8, citing the “distraction” of the controversy that circled his investment decisions.

The announcement came after Boston Fed President Eric Rosengren announced earlier in the day that he will retire on Thursday, Sept. 30, citing a long-term health condition.

The two Fed officials faced public scrutiny for investment trades made last year that raised questions about the effectiveness of Fed ethics rules.

Both faced calls for their resignations because of actions undertaken at a time when millions of Americans lost their jobs and the Fed was taking historic steps to bolster financial markets and the economy.

Kaplan made multiple million dollar trades in individual stocks in 2020 and Rosengren invested in real estate investment trusts, according to recent financial disclosures.

The financial disclosures did not look strikingly different from prior years, and both officials said their investment trades were cleared by ethics officers. But the actions were viewed as problematic here for a year in which the Fed also took unprecedented actions to stabilize financial markets and the economy in the wake of the rapidly-unfolding pandemic.

When asked if he trusted the two regional Fed bank presidents to do their jobs, Fed Chair Jerome Powell, who has launched a broad review of Fed rules, said last week that “in terms of having confidence and that sort of thing, I think, no one is happy here.”

‘DISTRACTION’

While Rosengren would have had to retire next June in any event because he would have reached the Fed’s mandatory retirement age of 65, Kaplan still had several years before he would have aged out of the job.

In a statement that did not mention the investment controversy, Rosengren revealed that he qualified for the kidney transplant list in June of 2020 and wanted to make “lifestyle changes” to protect his health.

Kaplan said in a statement that the questions over his investments had become a “distraction” for the central bank.

“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy,” Kaplan said. “Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work.”

The last such high-profile departure from the Fed was in 2017, when then-Richmond Fed president Jeffrey Lacker resigned while acknowledging he had, five years earlier, been the source of information used in a report by Medley Advisors that included at that point unreleased information.

Lacker took explicit blame, saying his “conduct was inconsistent with…confidentiality policies.” Neither Rosengren or Kaplan have acknowledged any breach of the Fed ethics rules that require them to abide by certain trading practices and avoid even the appearance of a conflict of interest.

The back-to-back resignations leave a suddenly wider opening for a potential overhaul of Fed leadership.

U.S. President Joe Biden is assessing whether to reappoint Fed Chair Jerome Powell and is poised to nominate as many as three others to the seven-member Washington-based Board of Governors, a group long criticized for mostly being comprised of white men.

The departure of the two Fed bank presidents could allow for a more diverse group here of regional bank presidents, who are chosen by local boards of directors with the approval of the Fed governors. Currently seven of 12 bank presidents are white men, three are white women, and two are non-white men.

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