–Resending To Fix Typos

By Vicki Schmelzer

NEW YORK (MNI) – New York Federal Reserve Bank President William
Dudley Monday downplayed the need for additional programs, such as the
Term Asset-Backed Securities Loan Facility (TALF) used during the U.S.
financial crisis.

“Markets are performing well,” he said during a question-and-answer
session following a speech at the Fordham University’s Gabelli School of
Business in the Bronx.

When asked about the need for TALF-like programs, Dudley said
current markets are not as dysfunctional as they were when the plan was
announced in November 2008.

Turning to the subject of the Fed again buying mortgage-backed
securities, he said the central bank does “have concerns about mortgage

“Depending on how the world evolves,” the Federal Reserve could
again step in, Dudley said.

On the subject of informing the market about monetary policy views,
he said it was difficult for the Fed to disseminate information in a
compact way, i.e. giving specific levels for inflation and unemployment.

Dudley was asked about the effect of the low interest rate
environment on those who rely on interest income to pay the bills.

“Low rates are not a good thing for everyone,” he acknowledged.

The Fed wants to keep rates low now, so that the U.S. can enjoy
economic recovery.

The central bank “is aggressive now, so we can raise rates faster
later,” Dudley said.

But “It is outside the Fed’s purview,” he said, when asked what the
Fed could do to spur U.S. corporations, with their vast cash hoards, to
spend money.

On other topics, Dudley said there were reasons for the Federal
Reserve to remain independent – away from the political process. He said
this “was not the first time that the Fed has been criticized

On the Volcker rule, he said implementing the rules in a way to
achieve the objective “is difficult” and “hard in practice.” There must
be a way to facilitate business and discourage proprietary trading at
the same time, he commented.

When asked about the eurozone crisis, Dudley stressed, the U.S. has
a “huge stake in a good outcome in Europe.”

** Market News International New York Newsroom: 212-669-6430 **