(Add details on market volatility, ethics note)
WASHINGTON, Feb 2 (Reuters) – U.S. Treasury Secretary Janet Yellen is convening a meeting of top financial regulators this week to discuss market-driven retail volatility driven by GameStop Corp. and other stocks.
Yellen will convene the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, a Treasury official said Tuesday.
Yellen applied for and received permission from ethics attorneys before convening the meeting, according to a document seen by Reuters, and engaging in broad issues in the financial services industry.
Yellen’s decision to ask for the resignation followed a Reuters report that, due to talk fees, was paid for by a key player in the GameStop saga, Citadel LLC hedge fund may have to ask for a waiver. waiver of ethics to deal with firm-related matters.
The Treasury official, who refused to identify himself by name, said the meeting would be held this week, possibly as early as Thursday.
“Secretary Yellen believes that the integrity of markets is important and has called for a debate on the recent volatility of financial markets and whether recent activities are consistent with investor protection and fair and efficient markets,” said the spokeswoman. Treasury, Alexandra LaManna, in a statement to Reuters.
Yellen’s stock comes after days of turns in shares of video game retailer GameStop driven by retail investors who have earned or lost billions of dollars in hedge funds and other investors in recent weeks. Retail activity has also raised silver prices in recent days.
GameStop shares fell by half Tuesday’s value and silver prices retreated as Reddit’s trading frenzy brought down the stock and commodity markets, at least for now.
Shares of GameStop closed 60% at $ 90. They’re now worth less than a fifth of their $ 483 high last week.
The saga is likely to speed up a regulatory review of the growing role that non-banking companies play in financial markets, regulatory experts say.
Treasury ethics attorneys have given Yellen flexibility to work on any related issues that come up, with no limits in current or future markets, the Treasury official said.
In a note granting permission to Yellen to convene the regulators’ meeting, Treasury ethics official Brian Sonfield said it would be “difficult, if not impossible,” for Yellen to challenge issues related to market volatility. .
“You are the Secretary of the Treasury, whose functions require you to be involved in a wide range of issues focused on these sectors,” Sonfield wrote.
“Problems related to these sectors could arise at any time without the opportunity to consult with the ethics office. These circumstances make it difficult, if not impossible, to challenge issues related to these sectors and also advocate prior authorization. “
Reports by David Lawder and Trevor Hunnicutt; Additional reports by Andrea Shalal; Editing by Heather Timmons, Cynthia Osterman and Peter Cooney