LYNDHURST, N.J. — A top Federal Reserve official on Friday downplayed the idea that the central bank was overly concerned about a new banking crisis, adding that the Fed was constantly monitoring institutions in both Europe and the U.S.
In a question and answer session following a speech to New Jersey business leaders, Federal Reserve Bank of New York President William Dudley was asked about a Wall Street Journal report saying that the Fed was working behind the scenes with financial firms on how to respond to the potential fallout from Europe's worsening debt crisis.
"The reality is we monitor both U.S. and European banks every day," Dudley said. Saying that banks were in a better position to withstand external shocks than they were prior to the 2008 crisis, Dudley added: "There's nothing to be particularly alarmed about."
When asked a question about the health of the U.S. economy, Dudley suggested that things were better off than they appear.
"Beneath the surface we are having a convalescence. It's slower and longer than we hoped for," but it's under way, the New York Fed chief said.
A recovery in still stagnant labor markets, however, has left the Fed "disappointed," Dudley said. Unemployment "is clearly much higher than we want."
Sovereign debt woes in Europe are roiling global markets, and appear to be taking a turn for the worse. Both Italian and Spanish government bonds have taken a hit, and Germany's stagnating growth is raising questions about the euro zone's ability to resolve the nearly two-year old saga.
