Financial vulnerabilities in the U.S. are "moderate," much lower than on the eve of the beginning of the global financial crisis, said Fed Vice Chairman Stanley Fischer on Thursday. Asset valuations and debt burdens in key markets "do not appear outsized," Fischer said in a speech at a conference sponsored by the Cleveland Fed. Two areas of potential vulnerability are commercial real estate and junk-bond markets, Fischer said. The Fed vice chairman cautioned there are "important blind spots" in the Fed's view of the financial system. "When it comes to financial stability, what you do not know really can hurt you -and there remains a good bit we do not know," he said. Data on securities lending, bilateral repos and derivatives trading remain inadequate, he said. In addition, more research is needed on "the interconnectedness" of shadow banks, banks and the broader financial system, Fischer said.
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