WASHINGTON (AP) — The International Monetary Fund warned Tuesday that American stock prices are high and U.S. insurers and mutual funds are vulnerable to financial shocks. It also urged Congress not to weaken financial regulations passed in 2010.

The IMF says that American banks are stronger but that risk has risen elsewhere. Its previous assessment of the U.S. financial system was conducted five years ago.

Overall, banks and insurance companies have increased their capital defenses against losses.

But the IMF expressed concern about risks outside the banking sector.

It warned the U.S. stock prices "are approaching levels that may be hard to sustain given profit forecasts" and the likelihood that the Federal Reserve will raise short-term interest rates later this year.

Mutual funds could "act as amplifiers" of a panic if jittery investors cash out, forcing funds to dump risky investments into a collapsing market.

The IMF warns that at time when ultra-low interest rates are pressuring insurance firms to take bigger risks, regulation of the business is "fragmented" between states. It repeated its calls for a federal insurance regulator.

"We consider it even more imperative at this stage," the IMF's Aditya Narain, who oversaw the report, told reporters Tuesday. He added that "in a severe scenario, (insurers) might be susceptible to major losses."

After the financial crisis, Congress passed a law tightening financial regulations. But regulators are still writing many of the rules needed to put the so-called Dodd-Frank law in place. The IMF urged regulators to finish the rule-writing but acknowledged it was a "sensitive" issue because some lawmakers want to "water down" the law.