Log in
Login
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

Fed's Tarullo : Central Banks Should Consider Role of Financial Stability

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/23/2013 | 12:50am CEST
   By Michael R. Crittenden 
 

WASHINGTON--Central bankers should consider what role financial stability should play when making monetary-policy decisions, both in preventing and responding to crises, Federal Reserve Gov. Daniel Tarullo said Friday.

Speaking in New York, Mr. Tarullo suggested there was "ample justification" for central bankers to consider financial stability when making decisions about monetary policy because of the large-scale effect a financial crisis can have on growth and unemployment.

"We need to consider carefully the view that central banks should assess the effect of monetary policy on financial stability and, in some instances, adjust their policy decisions to take account of these effects," he said in a speech.

Mr. Tarullo, the Fed's point man on financial regulation, also reiterated concerns he has expressed previously about oversight of the so-called shadow-banking system. While regulators have made progress on addressing the problem of "too-big-to-fail" firms, efforts to address risks posed by short-term funding markets have lagged.

"Except for the liquidity requirements agreed to in the Basel Committee, however, the liability side of the balance sheets of financial firms has barely been addressed in the reform agenda," Mr. Tarullo said.

He laid out a laundry list of international regulatory efforts he expects to see completed or having had progress in the coming months, expressing confidence regulators will be able to finalize efforts to impose capital surcharges on systemically important banks. Regulators should also finish work within the next six months on designating systemically important nonbanks, such as insurance companies, he said.

One area where he urged caution, however, is a liquidity rule known as the "net stable funding ratio" that has been in a state of limbo as regulators decide whether to press forward with the changes. Intended to keep banks from relying too heavily on short-term funding to help finance longer-term loans, the rule has been criticized by the banking industry.

Mr. Tarullo said more analysis should be done before the rule is finalized.

"I think we may be better advised to take the opportunity of this review to examine whether there are approaches that might address more directly the vulnerabilities for the financial system created by large nondeposit, short-term funding dependence at major financial institutions," he said.

Write to Michael R. Crittenden at michael.crittenden@dowjones.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
12:13p GLOBAL PRECIPITATED SILICA MARKET REPORT 2016-2021 - ANALYSIS, TECHNOLOGIES & FORECASTS - KEY VENDORS : Anten Chemical, Evonik Industries, Glassven - Research and Markets
12:13p Global Carbon Dioxide (CO2) Monitors (End-tidal Carbon Dioxide (EtCO2) Monitors, and Transcutaneous Carbon Dioxide (tcpCO2) Monitors) Strategic Business Report 2016-2022 - Research and Markets
12:13p GLOBAL INJECTOR NOZZLE MARKET REPORT 2016-2021 - ANALYSIS, TECHNOLOGIES & FORECASTS - KEY VENDORS : Camcraft, Daemar, Eaton - Research and Markets
12:12p EUROPEAN COMMISSION : Daily News 26 / 07 / 2016
12:12p PZ CUSSONS : Investor presentation and webcast - Final Results for the year ended 31 May 2016
12:12p NORD ANGLIA EDUCATION : Reports Third Quarter FY2016 Financial Results
12:12p NESTE : Renewable Diesel to reduce Flow Festival's carbon footprint again
12:12p VOLUNTARY ANNOUNCEMENT UPDATE ON DISCLOSEABLE TRANSACTION : acquisition of Sale Shares (Involving the Issue of Consideration Shares under General Mandate)
12:12p POUNDLAND : Form 8.5 (EPT/NON-RI) - Poundland Group Plc
12:12p MX OIL : 26/07/2016 Directorate Appointment
Latest news
Advertisement
Hot News 
-3.76%ORANGE : Gets Profit Boost From EE Sale
4.65%BT avoids break-up with plan to run network arm separately
6.17%VIRGIN MONEY UK : braced for extended period of low interest rates
-0.33%SABMILLER : AB InBev Raises Offer for SABMiller
-0.68%DRAX : eyes revenue from UK's back-up power schemes - CEO
Most Read News
07/25 MainOne, Radware Lead Fight Against Cyber Threats with DDoS Solution
Most recommended articles
06:04a BOJ leaning toward standing pat on policy, yen moves may complicate call
05:55aDJMAN : Funds Battered in Choppy Markets
05:51a EU antitrust regulators accept Paramount geoblocking concessions
05:45aDJHenkel's New CEO Faces Task of Maintaining Pace Set by Predecessor
05:42a ROYAL BANK OF SCOTLAND : RBS warns customers of possible charges on deposits