Federal Reserve Bank of New York President William C. Dudley said he doesn’t foresee the European Union dissolving.
“This is not something that I anticipate,” Dudley, 58, said at a hearing of a House Oversight and Government Reform subcommittee in Washington. “The European leadership is fully committed to the European Union,” though it’s a “political problem” so “maybe they’re not moving as fast as some of us might like,” he said.
Dudley said the Fed’s currency swap lines are intended to limit the impact of the crisis in Europe on the U.S.
“This is about helping ourselves,” he said. “This is about ensuring the flow of credit to U.S. households and businesses.”
The Fed is putting U.S. financial institutions through a “very severe stress test,” Dudley said. “Our job is to make sure that U.S. banks can withstand a very bad economic environment regardless of the source of that stress.”