NEW YORK - Federal Reserve Governor Susan Phillips said the agency has a significant responsibility to promote stability and avoid systemic risk in the derivatives market.

At a recent derivatives conference at the American Stock Exchange, Ms. Phillips said that in order to achieve its goal, the Fed will focus on improving risk management, improving infrastructure, and looking at the issue of transparency.

On the risk management issue, Ms. Phillips said the Fed is working to strengthen its examination process and helping to shore up bank capital levels. As for transparency, the agency is considering proposing accounting changes and working to increase disclosure in the marketplace.

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