Fed Governor Susan M. Phillips lashed out at the administration's proposal to consolidate bank regulatory agencies last week, warning that the Treasury plan would impair the conduct of monetary policy.

Conducting monetary policy would be difficult, she said, if the central bank did not have intimate knowledge of the banking system. In addition, she said, the Fed would be in a poor position to foresee and deal with financial crises if it did not have a regulatory role.

Finally, Ms. Phillips said that a single agency would probably be too large to be an effective and responsive regulator.

"You are going to be hearing more about this from the Federal Reserve," she warned in a speech.

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