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Fed's Dudley, in remarks on systemic risk, does not address policy

William Dudley, President and CEO of the Federal Reserve Bank of New York, speaks during the Asia Society and Economic Club of New York luncheon, in New York, September 24, 2012. REUTERS/Chip East

NEW YORK (Reuters) - New York Federal Reserve President William Dudley said on Friday that more needs to be done to reduce risks in collateralized short-term funding markets, but made no reference to the U.S. economy or monetary policy in his prepared remarks.

Speaking at the start of a New York Fed conference on "'Fire Sales' as a Driver of Systemic Risk in Tri-Party Repo and Other Secured Funding Markets," Dudley said regulators will have to step up to address risks if the industry cannot do so.

In a paper earlier this year, Fed researchers said regulators had "limited" tools to stop investors from rapidly selling assets should a dealer default.

The overnight repurchase, or repo, market, where investors borrow short-term cash using securities as collateral, came under severe stress after Lehman Brothers failed in 2008 and investors liquidated holdings. That prompted the Fed to launch emergency lending facilities.

(Reporting by Karen Brettell; Editing by Chizu Nomiyama)