William Dudley, the president of the Federal Reserve Bank of New York, said central bankers must be willing to act under certain conditions to counter asset bubbles, backing regulatory or supervisory tools over monetary policy.

Dudley, during a speech in New York on Wednesday, said monetary policy is not likely to work as well because "it is too broad." He also said that speaking out on the dangers of bubbles as they are forming "would allow the central bank to signal its concern."

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