NEW YORK (Reuters) - More work remains to ensure the world’s largest banks can be safely wound down in a crisis, including making the legal structure of their various entities more simple and rational, a top Federal Reserve policymaker said on Wednesday.
“Important work remains to be done to advance the capacity to effectively operationalize a GSIB resolution,” New York Fed President William Dudley said of the so-called global systemically important banking organizations that regulators have identified as a key risk to the world economy were they to get into trouble.
Dudley, one of the U.S. central bank’s top regulators, said “a more rational and less complex legal entity structure” is needed to improve the banks’ “resolvability.”
Banks and supervisors must also ensure that critical operations continue through the resolution, he added at a conference of bankers, traders, and regulators hosted by The Clearing House.
Addressing a separate post-financial crisis reform, Dudley said that 18 of the world’s largest banks achieved a key cross-border derivatives goal last week.
Reporting by Jonathan Spicer and Rodrigo Campos; Editing by Chizu Nomiyama