Federal Reserve Bank of Boston President Eric Rosengren said U.S. money-market mutual funds may be vulnerable to Europe's debt crisis.

Money-market funds "have sizeable exposures to European banks, by virtue of holding the banks' short-term debt," Rosengren said Friday in a speech at Stanford University in Stanford, California. Some funds "are potentially sensitive to a disruption in the European banking system, should one arise from the fiscal and sovereign-debt problems we are seeing."

Concerns that money funds could hurt stability haven't been adequately addressed by Congress or regulators to prevent a recurrence of the outflows after the bankruptcy of Lehman Brothers Holdings Inc. in 2008, Rosengren said. The Dodd-Frank Act passed last year mandated the Fed to monitor emerging risks to financial stability in the wake of the U.S. recession that ended two years ago.

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