The U.S. economy has yet to fully recover from the effects of the financial crisis, and regulators must continue to find new ways to strengthen the banking system, Federal Reserve Chairman Ben Bernanke said on Monday.
"The heavy human and economic costs of the crisis underscore the importance of taking all necessary steps to avoid a repeat of the events of the past few years," Bernanke told a group of economists and finance experts at a conference sponsored by the Federal Reserve Bank of Atlanta.
In a speech that did not touch directly on the outlook for economic growth or monetary policy, Bernanke focused on the lingering blind spots for financial authorities trying to prevent a repeat of the 2008-2009 meltdown.
Bernanke said financial stability matters had historically played second fiddle to monetary policy issues in the list of central bank priorities, but the crisis changed that.
"Financial stability policy has taken on greater prominence and is now generally considered to stand on an equal footing with monetary policy as a critical responsibility of central banks," he said.
Bernanke said recent bank stress tests will become a regular feature of the supervisory landscape, and for that reason the latest round of tests is being reviewed to identify possible areas of improvement in "execution and communication."
He reiterated a worry that he and other top policymakers have expressed about the continued vulnerability of money market funds.
"Additional steps to increase the resiliency of money market funds are important for the overall stability of our financial system and warrant serious consideration," Bernanke said.
"The risk of runs ... remains a concern, particularly since some of the tools that policymakers employed to stem the runs during the crisis are no longer available," he said. (Reporting By Pedro da Costa; Editing by Leslie Adler)
Copyright 2010 by Reuters. All rights reserved.
Copyright 2013 Thomson Reuters. Click For Restrictions