April 15, 2014 / 12:40 PM / in 4 years

Yellen preps Wall St for more wholesale funding rules from Fed

April 15 (Reuters) - The U.S. Federal Reserve is considering adopting more measures to address the remaining financial-stability risks in the short-term wholesale funding markets, Fed Chair Janet Yellen said on Tuesday.

In a video speech, Yellen praised new liquidity standards for global banking firms, but warned that they do not apply to so-called shadow banks or to the financial system as a whole.

The so-called Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) standards “do not fully address the financial stability concerns associated with short-term wholesale funding,” she said via video to a financial markets conference at the Atlanta Fed.

“Federal Reserve staff are actively considering additional measures that could address these and other residual risks in the short-term wholesale funding markets.”

She pointed to a study by the Basel Committee suggesting there would be net social gains from further reforms.

“While it would be a mistake to give undue weight to any one study, this study provides some support for the view that there might be room for stronger capital and liquidity standards for large banks than have been adopted so far,” she said. (Reporting by Jonathan Spicer in New York and Jason Lange in Atlanta; Editing by Chizu Nomiyama)

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