Fed vice chairman warns that it is a mistake to believe that the financial crisis is over

Fed Vice Chairman Stanley Fischer said on Monday that he does not see "a major financial crisis on the horizon".

He noted that central banks should not rule out using interest rates to fight financial instability.

"Most central bankers say they would prefer to use macroprudential tools rather than the interest rate" to maintain financial stability. It is not clear that there are sufficiently strong macroprudential tools to deal with all financial instability problems, and it would make sense not to rule out the possible use of the interest rate for this purpose, particularly when other tools appear to be lacking," the Fed vice chairman said.

Fischer pointed out that banks pushed back against regulations.

"Regulations have been strengthened and the bankers' backlash is both evident and making headway. Often when bankers complain about regulations, they give the impression that financial crises are now a thing of the past, and furthermore in many cases, that they played no role in the previous crisis," he said.

The Fed vice chairman warned that it is a mistake to believe that the financial crisis is over.