Keep open minded about QE's effects on bubbles -Fed's Williams

WASHINGTON Thu Jan 16, 2014 10:10am EST

WASHINGTON Jan 16 (Reuters) - While the Federal Reserve is dialing down its bond-buying based on economic improvements, policymakers need to keep "open minds" about how such stimulus affects asset prices and could lead to bubbles, a top U.S. central banker said on Thursday.

San Francisco Fed President John Williams, speaking at a Brookings Institution event attended by Fed Chairman Ben Bernanke and Fed Vice Chair nominee Stanley Fischer, added the first line of defense against bubbles should be financial regulation, not monetary policy.