By Pedro Nicolaci da Costa
STONE MOUNTAIN, Ga., April 9 (Reuters) – 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)
