US financial sector risks on the rise

Washington

LOW interest rates are feeding a surge in excessive risk-taking in more murky corners of the finance industry and leaving markets increasingly on edge, the US Treasury said on Tuesday.

With investors pushing ever-harder for better returns through increased leveraging, a new report from the Treasury's Office of Financial Research (OFR) said that money is increasingly flowing into areas with less oversight, raising the dangers to financial stability. The still-unexplained, historically precipitous swing in the bond market on one day in October d…