Fed's Dudley downplays market 'liquidity' concerns, eyes HFT

A top Federal Reserve official on Wednesday largely dismissed concerns that bond-market liquidity has sharply diminished in the wake of regulatory reforms, saying other changes like the rise in rapid electronic trading may play a bigger role. William Dudley, president of the New York Fed and a front-line Wall Street supervisor, said one-off "liquidity events" - in which the trading of Treasury and corporate bonds becomes significantly more expensive and difficult - may reflect the complex intera