Published: Tue, 24 Mar 2009 19:34:16 +0100
Fed's Duke Says Monitoring Daily Operations of Financial Firms
(CEP News) - The Fed is taking "vigorous" steps to improve risk management at financial firms, Federal Reserve Governor Elizabeth Duke said in prepared testimony to the U.S. House Financial Services Committee.
Duke said that leading up to the financial crisis, the lapses in regulation that overlooked risk-management failures were "unacceptable" and that the Fed is now monitoring the daily operations of major financial firms.The Fed is also ensuring that banks do not place unreasonable limits on lending, and continues to encourage financial institutions to make loans, she said.
Going forward, the Fed is planning a broader study of what kind of liquidity requirements firms should have, she said, and the crisis has revealed that some banks cannot borrow funds despite having highly rated collateral.
By Megan Ainscow, mainscow@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca
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