The Office of Financial Research (OFR) submitted its annual report to Congress stating that the Federal Reserve’s annual check of the banking system’s financial health, stress tests, fell short on several aspects, reports Reuters.
OFR director Richard Berner said: "Threats to financial stability are moderate, our tools for spotting them are better, and the financial system in many ways is more resilient compared with just before the financial crisis.
"But as the financial system evolves and innovates, we must be especially watchful for important new vulnerabilities that are emerging in dynamic financial companies and markets."
The OFR, which is part of the Treasury Department, noted that in order to make the financial system transparent several new policy tools have been designed.
To assist regulators gain better insight into the financial system, the OFR was established after the 2007-09 financial crisis.
In its report, the US risk watchdog also highlighted that other areas of concern in the financial system include excessive risk-taking and the threat of market disruptions.
Image: To make the financial system transparent, several new policy tools have been designed. Photo: courtesy of Gualberto107/ FreeDigitalPhotos.net
