The Federal Reserve plans to track the trading activity of banks in the Treasury market, giving a boost to efforts to build a central database of all trades in the $13.4 trillion market.

The Fed said Friday it would gather the information to provide to the Financial Industry Regulatory Authority, which is creating the audit trail for regulators who have historically taken a hands-off approach to the Treasury market. The Fed's involvement would allow regulators to include the trades of banks that aren't members of Finra, which polices brokerage firms that trade U.S. government debt. The Fed said it would seek public comment on the proposal.

"The collection of this data would allow the U.S. official sector a more complete view of Treasury securities trading in the secondary market," said Federal Reserve governor Jerome Powell.

The decision to build a database of all Treasury trades followed regulators' inability to quickly diagnose the causes of an October 2014 flash crash, when yields on U.S. debt plunged before quickly recovering. Regulators had to request trading data from a variety of brokers and other market participants to piece together trading activity on that day.

The Securities and Exchange Commission last week approved Finra's plan to build the reporting system.

Write to Dave Michaels at dave.michaels@wsj.com

(END) Dow Jones Newswires

October 21, 2016 23:55 ET (03:55 GMT)