Federal Reserve

Kohn: Oversight can only do so much

Donald Kohn, former vice chairman of the U.S. Federal Reserve
Mik Fuentes | Bloomberg | Getty Images

Easy monetary policy can create risks too big for regulators to handle, former Federal Reserve vice-chairman Donald Kohn said on Monday, according to a Dow Jones report.

Kohn—a potential candidate for the next Fed chair after Larry Summers' shock withdrawal—made the remarks at a Brookings Institution event.

"Very easy monetary policy often builds imbalances that may become so large that they can't be countered by regulation," Dow Jones quoted him as saying.

Future of the Fed survey

Kohn also questioned whether the Financial Stability Oversight Council—a key pillar of the Dodd-Frank financial reforms—has adequate resources to carry out its mission.

"The jury's still out," Kohn said, according to the report.