Federal Reserve Bank of New York President William Dudley said U.S. regulators, despite having made the financial system safer and less prone to panics, still had not eliminated the threat posed by institutions considered "too big to fail."
"This is work that we absolutely must complete," he said in prepared remarks he's scheduled to deliver Saturday at a conference on financial regulation in New York. "Without a well-functioning resolution process, the consequences of such a failure could still be catastrophic."
Dudley's comments come amid uncertainty over how far the incoming administration of President-elect Donald Trump will go in dismantling rules designed to prevent a recurrence of the financial crisis of 2007-2009. Republicans in Congress are preparing legislation that would roll back much of the 2010 Dodd-Frank Act that included regulations designed to prevent a repeat of the meltdown.
Dudley said the U.S. financial system was "much more resilient" than it was before the crisis, as reforms had made banks better able to absorb shocks and had removed structural issues that made the system more vulnerable.
'Big Problems'
Still, banks had not yet done enough to allow for their own orderly resolution in an emergency, he said.
