WASHINGTON, Nov. 15 (Xinhua) -- Overall risks to U.S. financial stability remained in the medium range this year, while market risks remained at a high level, the U.S. Office of Financial Research (OFR) said Thursday.
According to OFR's 2018 Annual Report to Congress, a combination of six group of indicators which monitor financial risks showed that threats to U.S. financial stability remained in the medium range.
Macroeconomic risks which include indicators of inflation, fiscal and external balance risks remained moderate. The OFR found more risks in the outlook a year ago.
Market risks, which include equity valuations, equity market volatility, ratio of house price to income and six other indicators, remained at a high level.
"Market risk is highest, reflected in historically high stock prices and the sensitivity of bond prices to changes in interest rates," said Ken Phelan, acting director of the OFR.
The OFR saw moderate level of credit risk, a mix of household and nonfinancial business risks along with real economy borrowing status.
"Credit risk is moderate, with risk rising from leveraged lending, tempered somewhat by risks from consumer credit," said Phelan.
The OFR also mentioned that solvency and leverage risks stayed low, while contagion risks were moderate. Additionally, funding and liquidity conditions in U.S. economy were "generally good."
However, the OFR said it would scrutinize the potential risks resulting from the rapid growth and evolution of cybersecurity and cryptocurrencies.
The OFR brought up its new proposal to collect data on cleared bilateral repurchase agreements, which is a vital source of short-term funding in the financial system.
The OFR is an independent bureau within the U.S. Department of the Treasury that was established by the Dodd Frank Act in the wake of the 2007-2008 financial crisis, tasked with providing administrative, technical, budget analysis and other services.
