In an address largely focused on scrutinizing murky corners of the financial system—the shadow banking system—Mr. Bernanke emphasized the need to establish regulations that protect the system as a whole from the risks that threatened it during the financial crisis
Mr. Bernanke did not discuss any potential changes to monetary policy.
The money-market mutual-fund industry remains prone to destabilizing panics even with new regulations already in place, Mr. Bernanke said at a conference here hosted by the Federal Reserve Bank of Atlanta. "The risk of runs created by a combination of fixed net asset values, extremely risk-averse investors, and the absence of explicit loss-absorption capacity remains a concern," Mr. Bernanke said.
During the financial crisis, the Treasury Department and Federal Reserve headed off a building panic by pledging to backstop all money funds after a large money fund with exposure to Lehman Brothers Holdings, Inc. debt "broke the buck," when a fund's net asset value falls below $1. The Securities and Exchange Commission imposed rules on the kinds of investments that money funds could hold in 2010, and SEC Chairman Mary Schapiro has advocated additional measures, which Mr. Bernanke said Monday night may be necessary.
"Additional steps to increase the resiliency of money-market funds are important for the overall stability of our financial system and warrant serious consideration," Mr. Bernanke said.
Among the ideas under consideration are scrapping money funds' fixed $1 net asset value and allowing it to float, like those of other mutual funds, or forcing funds to hold a capital buffer against the assets in their portfolios.
Paul Schott Stevens, president and chief executive of the Investment Company Institute, a trade association for the investment-company industry, has said he sees "no need for further regulatory changes" beyond the previous actions, and a spokeswoman said Monday night that Mr. Stevens stands by those comments.
Mr. Bernanke also said the repo market, where dealers finance their bond-trading positions, remains a source of concern. "We continue to urge market participants to improve their risk-management practices, and, in particular, to ensure that tools are in place to address the risks that would be posed to the repo market by the default of a major firm," the chairman said.
Reducing the risk the repo market presents to the broader financial sector has been on the Fed's plate for some time. This critical market allows financial-market participants to finance their positions by borrowing and lending securities to one another, in what are traditionally very short-dated transactions. The nature of the trading makes the sector subject to sharp volatility when participants lose confidence in one another, and this market played a key role in the failure of Lehman Brothers in 2008.
In February, a Fed-sponsored industry group failed to put in place reforms in a timely fashion, as the central bank had been requiring. The Federal Reserve Bank of New York, which has taken the lead in the matter, responded by saying it would take a greater direct involvement in overseeing the repo market, and that it may even move to restrict the type of collateral that can be used in the repo market.
Mr. Bernanke also said the parts of the financial system that lie outside the traditional safety net, and were so instrumental in driving the financial crisis, remain a key area of concern for policymakers.
"Panics and other stresses in shadow banking can spill over into traditional banking," the chairman said. "I am encouraged that both regulators and the private sector have begun to take actions to prevent future panics and other disruptions."