Reply #77: Financial complexity alters risk-Fed's Geithner [View All]

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http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-18T173217Z_01_NAT001850_RTRIDST_0_ECONOMY-FED-GEITHNER-URGENT.XML

NEW YORK, Oct 18 (Reuters) - The increased complexity of financial systems reduces the vulnerability of individual firms to risk, but adds to uncertainty over how well the financial system would respond to a major shock, New York Federal Reserve President Timothy Geithner said on Tuesday.

"The developments have contributed to what seems to be a significant improvement in the overall stability and resilience of the U.S. financial system by reducing the vulnerability of individual institutions to a broader range of potential shock," Geithner said in prepared remarks to a banking group.

"They may also, however, add to uncertainty about how well the system might function in the context of a major systemic shock," he said.