Bloomberg: Fed to Press Banks to Curb Liquidity Risk
Bloomberg reported that Fed chairman Ben S. Bernanke said the Fed plans to push financial companies to better manage liquidity risk and reduce reliance on wholesale funding in order to avert strains in the banking system.
Bernanke said in a speech entitled “Stress Testing Banks: What Have We Learned?” delivered on April 8 at a financial markets conference sponsored by the Federal Reserve Bank of Atlanta, “[I]n the area of liquidity and funding, continued improvement is still needed on some dimensions. Notably, supervisors will continue to press banks to reduce further their dependence on wholesale funding, which proved highly unreliable during the crisis. And, in analogy to the need for effective capital planning, banks of all sizes need to further strengthen their ability to identify, quantify, and manage their liquidity risks.”
To read the full Bloomberg article click here.
To read Bernanke’s speech click here.