The first test that must be applied is to assess whether the public interest objectives could be met by implementing a rapid payout of insured deposits, or any other definition of deposits which the authorities wish to protect via a top-up extension of the deposit insurance scheme. The remainder of the bank would then be put through something known as the bank insolvency procedure. The test of whether this procedure could be used depends in large part on how long depositors would face without access to their funds. At the moment I think few banks could meet an acceptable timetable for payout. Moreover, for bigger banks this would always be too disruptive as an approach. Work is underway to facilitate rapid payout of depositors under the Financial Services Compensation Scheme and I hope that in the next year, banks will be able to meet the objective that they have been given by the FSA to be able to make payouts to depositors within seven days. This is not a trivial task as I readily recognise, and achieving it would not mean that this approach would always be chosen in a resolution. That depends on the situation at the time. If the failure of a bank is determined to have wider systemic consequences that could undermine financial stability, confidence in the banking system or depositor protection, then the SRR provides a range of other tools to be used.
William C Dudley: The US economic outlook and monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Club of New York, New York City, 12 November 2015. *  *  *  Jonathan McCarthy, Paolo Pesenti and Joseph Tracy assisted in preparing these remarks. It is a pleasure to have an opportunity to speak here at the Economic Club of New York. As the current chair of the Club, I’m admittedly biased, but this is a great venue to have the opportunity to share my thoughts about the U.S. economic outlook and the implications for monetary policy. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. Before I start, I want to be clear about one specific issue I will not address today – that is, whether or not I expect the monetary policy normalization process to commence at the next FOMC meeting in December. Let me just say that my view will depend on how incoming data, broadly defined, influences my assessment of the prospects for further improvement in the U.S. labor market and my confidence that inflation will return to the FOMC’s 2 percent objective over the medium term. With that caveat out of the way, how do I assess the U.S. economic outlook?