WASHINGTON - Federal Reserve Governor Susan M. Phillips on Tuesday urged bankers to disclose more information about their use of over-the-counter derivatives.

Speaking at a conference sponsored by the International Swaps and Derivatives Association. Ms. Phillips said developing appropriate disclosure and accounting standards for derivatives use would be "the next series of challenges to market participants and regulators."

"This is an area in which much more progress needs to be made," Ms. Phillips said, adding that bank supervisors "should enlarge their agendas to provide a leadership role" there.

Emerges as Spokeswoman

Ms. Phillips, a former chairman of the Commodity Futures Trading Commission. has emerged as the Fed's spokeswoman on derivatives issues.

On Wednesday. she said the international nature of the market, as well as its rapid evolution. provide special challenges to government oversight.

"A flexible regulatory regime is crucial if we are to let market forces allocate these services in a manner similar to the way that the market allocates credit," she said.

Ms. Phillips also said public-policy makers "have not fully assessed the potential systemic effects of these instruments under various market conditions."

"The Federal Reserve is devoting significant attention and resources to this issue, given our responsibility to contain systemic risks." Ms. Phillips said.

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