WASHINGTON—Regulators should continue to advance reforms to the financial system to address vulnerabilities revealed by the coronavirus-induced market turmoil a year ago, Federal Reserve Gov. Lael Brainard said Monday.
Fragilities remain in short-term funding markets, including from certain money-market mutual funds that experienced destabilizing investor outflows that eclipsed those during the 2008 financial crisis, leading to the second federal intervention in 12 years to prop up the market, she said.
“This rush of outflows as a share of assets was faster than in the run in 2008, and it appears some features of the money funds may have contributed to the severity of the run,” she said in a speech to the Institute of International Bankers.
Ms. Brainard said the Fed is supporting the work of the Financial Stability Board to assess options for mitigating the vulnerabilities of money funds globally and report on them later this year.
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