Federal Reserve Vice Chairman Jefferson: Central Banks should emphasize being ready to provide liquidity during times of stress.

Federal Reserve Vice Chairman Philip Jefferson said that central banks around the world should be prepared to provide liquidity to the financial system at any time, but he also warned against encouraging excessive risk-taking. "Central banks must make it clear that they are prepared to provide liquidity at any time if market pressures arise, this is crucial," Jefferson said in prepared remarks for the 2025 Financial Markets Conference at the Atlanta Fed. "But central banks must also take measures to minimize moral hazards," he added. "Here, 'moral hazard' refers to the concern that publicly provided liquidity may encourage private financial institutions to take on excessive risks."