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Federal Reserve's Yellen says no risks to stability 'flashing red' as markets boom

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Amid booming stock markets that have hit repeated records, Federal Reserve Chair Janet Yellen said Wednesday she does not see any risks to financial stability "flashing red" for regulators.

[WASHINGTON] Amid booming stock markets that have hit repeated records, Federal Reserve Chair Janet Yellen said Wednesday she does not see any risks to financial stability "flashing red" for regulators.

She said the high stock prices are not a risk factor the central bank is currently focused on.

Speaking at a press conference after the Fed raised the benchmark interest rate for the third time this year, Ms Yellen said that "other indicators of financial stability risks (show) there is nothing flashing red there or possibly even orange."

While stock values "are on the high end of historical ranges," that could be justified in a long period of low interest rates, she said.

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"There's less to lose sleep about now," Ms Yellen said, adding, "We have a much more resilient, stronger banking system. And we are not seeing some worrisome build-up in leverage or credit growth at successive levels."

Ms Yellen also did not express much concern about digital currency bitcoin which has seen a meteoric rise in recent weeks especially since its debut this week on a mainstream exchange through futures trading on Chicago's Cboe.

She called the cryptocurrency "a highly speculative asset," but said it "plays a very small role in the payment system," and the Fed has no role in regulating it.

"It is not a stable source of store value and it doesn't constitute legal tender," Ms Yellen said.

AFP

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