Potential misperceptions of liquidity with ETFs, declining credit standards in certain loan markets and high valuations in commercial real estate pose real market risks, the Federal Reserve said in a report citing specific threats, such as fire sales and runs in some mutual-fund products, Bloomberg reports. "As mutual funds and ETFs may appear to offer greater liquidity than the markets in which they transact, their growth heightens the potential for a forced sale in the underlying markets if some event were to trigger large volumes of redemptions," the Federal Reserve Board said in its semi-annual report to Congress.

Despite improvements of high-yield, high-risk loans, the Fed went as far as to warn about the potential for runs on prime money market funds with fixed net asset values in the event that they see a dip in the price of securities.

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