MNI TRANSCRIPT: Powell on Financial Stability Risks

     WASHINGTON (MNI) - The following is the portion of a transcript from

Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting

Wednesday:

     Q: I wanted to ask about financial stability risks. Recently the IMF and

some other global policy makers have been expressing concerns over the high

level of risky corporate debt. So as rates get lower in the U.S. and around the

world, are you more worried about financial stability risks and reach for yield?

     A: We monitor financial stability risk very carefully all the time. It is

what we do since the financial crisis. Currently we don't see large imbalances,

this long expansion is notable for the lack of large financial imbalances like

the ones we have seen certainly before the crisis happened. So we have a four

part framework I will quickly mention the first is lever arranging the financial

system which is low by historical standards. Second is funding risk which is the

risk of runible funding. And that risk is also quite low for banks but also for

the nonbanking financial sector. If you look at asset prices, we see some high

asset prices but not broadly across a range. We don't see bubbles and that kind

of thing. Then that leaves the fourth which is lever arranging the nonhousehold

sector. House holds we don't see leverage. We see them in good shape. Plenty of

households are not in great shape. But the -- that hooefs businesses. Leverage

among corporations and other forms of business private businesses is

historically high. We is have been monitoring it carefully and taking

appropriate steps. So that's what I would say. But it is corporate debt is one

part of a larger part of our framework. And it is something that we are paying

quite a bit of attention to and it has been part of the last couple of shared

national credit exams.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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