WASHINGTON — Federal Reserve Board Governor Jeremy Stein on Thursday urged policymakers to consider using some of the central bank's monetary policy to help address gaps in regulation and foster greater financial stability.

"One of the most difficult jobs that central banks face is in dealing with episodes of credit market overheating that pose a potential threat to financial stability," said Stein. "As compared with inflation or unemployment, measurement is much harder, so even recognizing the extent of the problem in real time is a major challenge. Moreover, the supervisory and regulatory tools that we have, while helpful, are far from perfect."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.