(Bloomberg) -- Investor appetite for risky assets amid an extended period of low interest rates is drawing fresh scrutiny from global financial regulators.

The Financial Stability Board, a Basel-based body that monitors the global financial system, is setting up a new “surveillance framework” to spot any problems resulting from the current environment, its chairman, Randal Quarles, said Sunday. The uncertain economic outlook, as well as rising levels of corporate and public debt, present increasing risks to the system, he said.

“The long period of sustained global growth and rising asset prices may have weakened the incentives to take precautions against unforeseen events,” Quarles said in a letter to Group of 20 finance ministers and central bank governors meeting in Washington this week. “The prospect of a continued environment of ‘search for yield’ reinforces the case for identifying and addressing emerging risks to financial stability early on.”

The FSB, set up in response to the financial crisis a decade ago, is already analyzing the market for leveraged loans and collateralized loan obligations, which has grown rapidly in recent years. A summary of its findings should be published before the end of the year, Quarles said.

To contact the reporter on this story: Alexander Weber in Brussels at aweber45@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Amanda Jordan, Angela Cullen

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