The International Monetary Fund says U.S. insurers and mutual funds are vulnerable to financial shocks and urges Congress not to weaken regulations passed in 2010.
The IMF says that American banks are stronger but that risk has risen elsewhere. Its previous assessment of the U.S. financial system was conducted five years ago.
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Mutual funds could "act as amplifiers" of a panic if jittery investors cash out, forcing funds to dump risky investments into a collapsing market.
The IMF warns that at time when ultra-low interest rates are pressuring insurance firms to take bigger risks, regulation of the business is "fragmented" between states. It calls for a federal regulator.
The IMF urges U.S. regulators to finish enacting regulations Congress passed in 2010, though some lawmakers want to "water down" the law.