WASHINGTON — Federal Reserve Board Governor Daniel Tarullo Thursday said a lot of progress has been made in international cooperation of financial regulators, but there is still a way to go on a number of issues, including orderly resolution, short-term wholesale funding and derivatives.

"There has been a good deal of progress made, certainly in the sense that we have agreed internationally, and domestically, on important changes in capital and liquidity requirements," said Tarullo, who heads the Fed's regulatory efforts.

"The areas I would identify as most in need of continued attention are resolution, continuing work on resolution ... and in the short-term wholesale funding area," Tarullo said.

Tarullo, who also serves as chairman of the Financial Stability Board's standing committee on supervisory and regulatory cooperation, said that regulators have a "collective interest in having international regulation," he said, adding that it is in everybody's interest to "ensure global financial stability."

He also cautioned international regulatory institutions, such as the Basel Committee and the FSB, from becoming too structured and not flexible enough to address ongoing concerns.

"There's a tendency to become more formal," Tarullo said at the Bretton Woods Committee discussion. "It's going to be very important for us to do two things in streamlining the deliberative and quasi-negotiating functions of the FSB and the Basel Committee." First, he said, is integrate fully the new members that have recently joined.

And second, he said, "those of us fortunate enough, and given responsibility, to be placed in a leadership role need to be more proactive ... on a more ongoing basis."

Tarullo added that while institutions such as the Basel Committee and the FSB are critical, "there's some things not as susceptive to peer review," and this is where organizations such as the International Monetary Fund have an important role.

Asked about derivative regulations, Tarullo said there had been "considerable progress, but there's still a good ways to go. I'd be happier if we'd be further along."

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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