CHARLOTTE, N.C., April 19 Regulators should keep
an "open mind" about making banks pay up front for access to
central bank liquidity as part of new rules to ensure that big
firms can withstand severe financial stress, a senior U.S.
Federal Reserve official said on Friday.
Fed Board Governor Jeremy Stein, weighing in on the complex
issue of liquidity coverage ratios being worked on by the Basle
banking committee, also said it made no sense to allow unpriced
access to central bank 'lender of last resort' capacity.
"It is worth keeping an open mind about the more widespread
use of CLF (committed liquidity facility)-like mechanisms," he
told a credit market conference hosted by the Richmond Fed.
"It puts a cap on the cost of liquidity regulation. Such a
safety valve would have a direct economic benefit, in the sense
of preventing the burden of regulation from getting unduly heavy
in any one country," he said.