Quarles cautions pandemic stimulus could obscure risks for banks

FILE PHOTO: Financial Stability Board chair and Federal Reserve Vice Chairman for Supervision Randal Quarles addresses the Economic Club of New York in New York City, U.S., October 18, 2018. REUTERS/Brendan McDermid

WASHINGTON (Reuters) – Federal Reserve Vice Chair Randal Quarles cautioned Thursday that needed efforts to provide more economic stimulus could obscure risks at banks by helping keep borrowers afloat temporarily.

In prepared remarks, Quarles also said the Fed should take into account how bank risk is impacted by broader developments, like the growing role of nonbank finance, in further honing its annual stress tests of large firms. He also reiterated that the Fed’s bank supervisors should use as much data-driven analysis as possible.

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