J.P. Morgan & Co CEO Jamie Dimon and Minneapolis Fed President Neel Kashkari have squared off this week over the issue of too big to fail.
The issue has been solved, Dimon said, in a letter to shareholders. Kashkari responded that Dimon was demonstrably wrong.
Read: Fed’s Kashkari disagrees with J.P. Morgan boss
On Friday, New York Fed President William Dudley tried to chart a middle course between these two extremes, saying that significant progress has been made on too big to fail but “we’re not quite there yet.”
In a speech at the Princeton Club of New York, Dudley said an effective mechanism that allows a firm to fail without threatening to bring down the entire financial system was close. But he said there are still cross-border issues to be worked out.
Dudley highlighted progress on the so-called “living will” process that mandates firms do their own contingency planning.
And he said the Fed’s recent rule that requires the biggest banks to have minimum levels of total loss-absorbing capital could be used to recapitalize these firms in bankruptcy.