Each supervision department, therefore, should continue its ongoing efforts and, where necessary, strengthen its internal procedures for obtaining required disclosures, educating employees about conflict of interest rules, and monitoring for potential conflicts to ensure compliance with existing programs. Examiners should not take out a loan or establish a line of credit at any state member bank, bank holding company or its nonbank subsidiaries while employed at the Federal Reserve Bank, including such organizations in other Reserve Bank Districts. Because of the special rules applicable to them, examiners must disclose all borrowing relationships with banking organizations, including credit cards or credit lines with zero balances. Appropriate, trained staff should review the disclosure forms so that conflict of interest issues are identified and resolved in a timely manner. Reserve Banks should consult with the Board's supervision and legal staffs when issues arise.
Consultation is essential to ensure System consistency.
The following are elements that have proved to contribute to successful Reserve Bank ethics programs. Examiner borrowing rules and investment prohibitions should be reviewed thoroughly with prospective employees during the interview process to screen and resolve potential problems. Guidance that is provided in the form of a recitation of the Board FRAM or legal citation, by itself, is not a very effective means for communicating the rules. Rather, guidance to employees should outline borrowing and conflict of interest rules in simple, concise terms, and may illustrate rules by providing examples. A demonstrated commitment to a sound and well-managed program by senior Reserve Bank officers ensures that policies and procedures are periodically reviewed and updated, and that the program is effectively run with tight controls.