Hard macroprudential policy rules must be augmented with discretionary powers for supervisors in order to effectively manage systemic risk, Janet Yellen, the vice chair of the Federal Reserve's board of governors, said on Monday.

In her maiden speech as Fed deputy, delivered in Colorado, Yellen said fixed macroprudential policy rules must be complemented by the ability for regulators to intervene at their discretion. "Fixed rules will diminish the need for policymakers to make the difficult