GO
Loading...

Enter multiple symbols separated by commas

Fed's Warsh: Markets Working Well After Declines

Financial markets are working well despite sharper swings in asset prices, and overall liquidity does not seem in short supply after last week's stock market declines, Federal Reserve Governor Kevin Warsh said on Monday.

"While premiums on riskier assets rose some last week, markets are functioning well amid higher volatility," he said in comments prepared for delivery to the Institute of International Bankers.

"Market discipline appears effective as investors are reviewing their positions, and overall liquidity does not appear to be in short supply," he said.

Warsh said greater liquidity -- the ability to transform one asset into another without loss of value -- is driven by strong U.S. economic performance, financial innovation, and increased international capital flows.

High levels of liquidity have helped prevent imbalances in markets and helped investors disperse risks, he said.

As a result, strong liquidity has helped the economy withstand shocks such as corporate accounting scandals and bond downgrades for auto companies.

"The effects on the broader market appear to have been remarkably contained," he said.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.