February 7, 2013 / 2:51 PM / 5 years ago

Fed's Stein says low rates create risks, must watch corporates

WASHINGTON, Feb 7 (Reuters) - An extended period of low interest rates could create risks to financial stability, and policymakers should keep an eye on junk bond and leveraged loan markets for signs of excessive risk-taking, a top Federal Reserve official said on Thursday.

Jeremy Stein, a member of the U.S. central bank's powerful board of governors, said the current evidence is inconclusive.

"In terms of the variables that could be informative about the extent of market overheating, the picture is mixed," Stein said in prepared remarks at a conference sponsored by the St. Louis Fed.

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