The US Federal rein in banks and protect taxpayers. Neel Kashkari, head of Minneapolis Fed, is of the view that while the 2010 Dodd-Frank financial reform law has made significant progress in strengthening the financial system, it did not go far enough. He has announced the launch of an initiative in his new role as president of the Federal Reserve Bank of Minneapolis, to develop tougher regulations to solve the problem of banks considered too big to fail.
“I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy,” Kashkari said in a speech to the Brookings Institution think tank. “Now is the right time for Congress to consider going further than Dodd-Frank with bold, transformational solutions to solve this problem once and for all,” he added. Among the options that he feels should be given serious consideration are breaking up large banks into smaller, less connected, less important entities and turning large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail.
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