The corner stone of The New York Federal Reserve Bank is seen surrounded by financial institutions in New York's financial district March 25, 2015. REUTERS/Brendan McDermid
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Sections of the U.S. financial system that may be vulnerable to investor panic are raising concerns inside the Federal Reserve, as policymakers preparing for the first interest-rate hike in nearly a decade seek to ensure that the market is ready and able to handle it whenever it happens.The Fed is particularly worried about whether the booming asset management industry can withstand a run of redemptions in a financial crisis.Fed Governor Daniel Tarullo and Atlanta Fed President Dennis Lockhart have offered similar warnings about liquidity in the last few months.Bond markets are still susceptible to another "taper tantrum" such as the one that happened in 2013 when then Fed Chairman Ben Bernanke caught investors off guard by suggesting the central bank could trim bond purchases earlier than the market expected.
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