Fed's Dudley: QE will stop if it causes inflation (by Greg Robb)

WASHINGTON (MarketWatch) - A top Federal Reserve official on Tuesday assured foreign economic policymakers that the Fed's policy to purchases assets "will not continue the moment" it looks like it may be generating inflation. In a speech in Zurich, William Dudley, the president of the New York Federal Reserve Bank, focused on improving international cooperation on economic policy and oversight of financial markets. On monetary policy, Dudley said that central banks should strive to be transparent frameworks to monetary policy that are viewed as "credible and durable." He said the Fed has tried to provide greater clarity about its 2% inflation target. It should be easier for governments to cooperate across borders on bank regulation compared to rate policy because the benefits are easier to see up front, Dudley said. He called on supervisors in a bank's home country to share more information with regulators around the world. And he said that governments have to decide about the roles of home and host bank regulators during times of stress.