The U.S. Federal Reserve's political independence may make it better suited than a council of regulators to spot and act upon behavior that could threaten the entire financial system, a senior Federal Reserve official said on Thursday.

It seems like it would be difficult for an interagency council to come to agreement on specific risk and an associated action when times are good, St. Louis Federal Reserve Bank President James Bullard said, according to slides prepared for a Levy Economics Institute conference in New York.

This type of decision may be better suited to the Fed, he said. He said it was unclear a systemic risk council would be able to prevent a future crisis.

Lawmakers want a new entity that can spot and head off the next crisis. The Senate bill would set up a 9-member council of regulators, chaired by the Treasury Secretary. The House of Representatives bill proposes an inter-agency council chaired by the Treasury as well, but gives the Fed a bigger role as chief policy agent.

In his presentation, Bullard argued for a broader regulatory role for the U.S. central bank.

A Fed with an appropriately broad regulatory responsibility provides the U.S. with the best chance to head off a future crisis, he said. Many of the problems that led to the current crisis occurred outside the Fed's purview, complicating the Fed's role as lender of last resort, he added.

Due to its narrow regulatory authority, the Fed had a severely limited view of the financial landscape as the crisis began.

The U.S. Congress is moving closer to a decision on legislation to reform financial regulation after the worst financial crisis since the Great Depression.

Bullard warned that only a few of the current proposals are likely to help prevent future crises.

A consumer financial protection agency, a key part of the Obama administration's financial reform push, would not have prevented the gold rush into the housing market, he said.

Democrats want a consumer protection agency to put a stop to abusive home mortgages and deceptive credit cards.

And while he agreed that a resolution regime for failing financial institutions would prevent firms from taking excessive risks, he said funeral plans for firms did not strike him as credible.

Bullard added that under current reform proposals, the U.S. would remain vulnerable to runs in the shadow banking system, and called the lack of reform of government sponsored enterprises Fannie Mae and Freddie Mac a sin of omission.