By Howard Schneider

WASHINGTON (Reuters) - The U.S. faces only moderate financial risks despite elevated asset prices and concern over the possible impact of rising corporate debt, U.S. Fed chairman Jerome Powell said on Wednesday as the central bank released a broad overview of the health of credit markets and the financial system.

The report flagged tensions over trade, the turbulent Brexit discussions, and trouble in China and emerging markets as shocks that could rock a U.S. financial system in which asset prices are "elevated" and business credit quality may be "deteriorating."

But in a speech following the release of the report, Powell said "overall financial stability vulnerabilities are at a moderate level...The risks of destabilizing runs are far lower than in the past. The institutions at the heart of the financial system are more resilient."

"We do not detect a broad-based buildup of abnormal or excessive leverage," of the sort that, as in the 2007 to 2009 financial crisis, led lending to evaporate and amplified what became the worst economic downturn since the Great Depression, Powell said.

The report is the first of what the Fed intends as a twice a year exercise in flagging risks and delving deep into the weeds of the massive U.S. private credit system -- from bank funding to household credit card default levels and into the thicket of issues like hedge fund borrowing that even the central bank cannot fully surveil.

Publishing the report regularly bolsters the Fed's ongoing moves towards greater public transparency about how the central bank uses its broad powers -- a step Powell has said is important to sustain the Fed's continued independence from elected officials in setting monetary policy. In this case it also, subtly, states the case for why regulatory changes made since the financial crisis a decade ago are worth the cost.

"After 10 years of concentrated effort in the public and private sectors, the system is now much stronger, with greater capacity to function effectively in stressful times," Powell said.

STRENGTHS AND RISKS DETAILED

The report noted several ways in which the financial system is well-buffered. It cited the strong capital position of banks, household borrowing generally in line with incomes, and a system now less vulnerable to the sort of runs or credit crunches that nearly shut down the global economy in the 2007 to 2009 financial crisis.

But the report also noted that stock prices are high by some measures, commercial real estates values have been "growing faster than rents," and that lendershave been freely funding risky corporate loans.