The build-up of debt before the 2007-2009 financial crisis, and the crisis itself, created an 'unusually anemic recovery' that has overwhelmed policymaker efforts to stimulate demand with monetary and fiscal easing, a top Federal Reserve official said on Friday.

Regulators have made a "good start" on boosting capital requirements and creating other rules to rein in the kind of risk-taking that fueled the recent boom and bust, New York Federal Reserve Bank President William Dudley said in the text of remarks prepared for delivery in Washington on Friday.

"The extraordinarily poor economic outcomes we see today underscore the importance of building a financial system that is resilient in its ability to provide credit to households and business throughout the business cycle," Dudley said.

Monetary policy is too blunt a tool to stop booms, he said, and while regulators may try, they will be unable to head them off without a profound overhaul of the financial system.

Banks are better capitalized than they were at the depths of the crisis, he said, but while progress to boost liquidity has not gone as far as needed, he said.