Tags: Fed | Lacker | Dodd | Bill

Fed's Lacker: Bank Reform Bill Won't Help Stability

Tuesday, 06 Apr 2010 12:37 PM

Richmond Federal Reserve Bank President Jeffrey Lacker told CNBC on Tuesday that resolution authority as being currently floated in Congress is flawed.

"A major danger is that there's going to be more instability in financial markets rather than less," he said of a banking reform bill proposed by Senator Christopher Dodd.

"I read the Dodd Bill and the mechanism it sets up for the resolution authorities. It doesn't strike me that it's likely to help us there."

He also said he is becoming less comfortable with the Fed's language promising to keeping interest rates low for an extended period and would favor changing it shortly before the Fed raised rates.

"I said a couple months ago I was comfortable with it. I'm still comfortable with it, but my comfort is diminishing somewhat over time," he told CNBC. "And — it's somethin' that, you know, we're not gonna — I'm not be comfortable with forever."

Lacker expects "employment to expand this year; probably not very rapidly and probably not enough to bring the unemployment rate down by a tremendous amount."

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