Democratic Underground - Fed's Ferguson says markets may underprice risk

Reply #76: Fed's Ferguson says markets may underprice risk [View All]

UpInArms

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Wed Sep-21-05 10:34 AM
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76. Fed's Ferguson says markets may underprice risk

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-21T144927Z_01_WBT003852_RTRIDST_0_ECONOMY-FED-FERGUSON-URGENT.XML

WASHINGTON, Sept 21 (Reuters) - Federal Reserve Vice Chairman Roger Ferguson on Wednesday said many financial markets may be underpricing risks and said both policy-makers and markets should take a medium-term view when gauging risk.

In a statement to be delivered to the IMF's policy-setting panel on Saturday on behalf of the Financial Stability Forum, Ferguson pointed to a number of factors, including low levels of risk premia and long-term interest rates, that suggested a high level of risk-taking.

"Considering the potential challenges these developments imply, many markets may perhaps be underpricing risks going forward," Ferguson said.

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Reply #76: Fed's Ferguson says markets may underprice risk [View All]