WASHINGTON – Federal Reserve Chair Janet Yellen warned the incoming administration not to roll back the Dodd-Frank Act out of hand, saying that the dire consequences of the housing bubble demonstrated the importance of ensuring that the financial sector is better managed and capitalized.

"This is progress, I would say, that it is very important not to roll back," Yellen said. "There may be some changes that could be made … but I would urge that it is important to keep this in place."

But she also emphasized that given several egregious cases of wrongdoing by big banks recently, there clearly needs to be more done to fix institutions' culture.

"There have been many ways in which there have been many compliance failures at banking organizations," Yellen said. "This is something that is important. The failings in a number of institutions certainly suggest there is room for improvement."

Speaking at a press conference following the Fed's Federal Open Market Committee meeting on Wednesday, Yellen said that the central bank is in discussions with President-elect Donald Trump's team to ensure that the transition between the administrations is as smooth as possible.

But she said she would ask the new administration and the Republican majorities in the House and Senate to focus their attention on areas of Dodd-Frank reform that have wide consensus: reducing the regulatory burden for community banks and a "modest" increase in the $50 billion asset threshold for banks that triggers enhanced prudential standards.

She also said that the existing framework for resolution plans has gone a long way toward Republicans' stated goal of ending "too big to fail."

"I would advise – and we have been trying to do this – to look for ways to reduce the burden on community banks and smaller institutions," Yellen said. "I think there is broad agreement also that we should end 'too big to fail,' and that means not only reducing the odds of the Fed [bailing out] a systemically important institution, but making sure that, should such a firm fail, it could be resolved in an orderly way."

Yellen also elaborated on her intended future with the Fed.

After Trump's election, she said she intends to serve out her term as Fed chair until it expires in 2018. But when asked Wednesday whether she would accept reappointment by Trump, she said that at the moment "that is a decision I don't have to make." When asked whether she might stay on at the board of governors after her chairmanship – her seat on the Board does not expire until 2024 – she deflected, saying "that is a decision for another day."

The press conference came as the FOMC decided unanimously to hike interest rates by 25 basis points – the first and only hike in 2016 and only the second change of any kind in interest rates since they were dropped almost to zero in 2008.

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