WASHINGTON, Nov 10 (Reuters) - Governments must convince markets of their ability and willingness to wind down large financial firms instead of bailing out their creditors and shareholders, a senior Federal Reserve official said on Tuesday.

Fed Governor Daniel Tarullo said there was no guarantee that future resolutions of systemically important firms would proceed smoothly or predictably. He made the remarks in a prepared speech at the Institute of International Bankers Conference on Cross-Border Insolvency Issues in New York.

"In light of what has happened over the past 18 months, it is imperative that governments convince markets that they can and will put large financial firms into a resolution process rather than bail out creditors and shareholders," said Tarullo.

Authorities in the United States are proposing a so-called resolution authority as part of sweeping legislation to overhaul financial regulation.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)