Federal Reserve Board Governor Susan M. Phillips said Wednesday that the financial system is much more prepared for a market crash than when stocks last tanked, in 1987.

Exchanges have increased their ability to handle surges in volume and investment houses are much better capitalized than they were a decade ago, Ms. Phillips said at a conference at Bentley College in Waltham, Mass.

Also, she said clearing houses have established backup lines of credit that they can tap in a crisis to ensure member banks are paid on time, even if one institution defaults.

-Jaret Seiberg

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