Large banks should be doing more to account for the counterparty risks posed by hedge funds and other nonbanks, Federal Reserve Vice Chair for Supervision Michael Barr said.
Details: Speaking in New York, Barr cited the growth of the hedge fund industry to roughly $9 trillion in assets and said the Fed will use its tools to assess counterparty credit risk. For instance, the Fed will publish the aggregate results of several exploratory analyses alongside this year's stress test results, he said.