Posted on 02/24/2011 4:59:49 AM PST by TigerLikesRooster
Kansas City Federal Reserve Bank President Thomas Hoenig calls for Wall Street banks to be broken up
A member of the US Federal Reserve has called for Wall Street's financial giants to be broken up to avoid another another crisis.
By Andrew Trotman 11:07PM GMT 23 Feb 2011
“I am convinced that the existence of too-big-to-fail financial institutions poses the greatest risk to the US economy,” Kansas City Federal Reserve Bank President Thomas Hoenig said.
“They must be broken up. We must make sure that large financial organizations are not in position to hold the US economy hostage. We must not allow organisations operating under the safety net to pursue high-risk activities and we cannot let large organisations put our financial system at risk.”
Mr Hoenig also argues that the most sweeping overhaul of US financial regulation since the Great Depression won’t prevent the largest banks from taking excessive risks and increasing market share.
“In my view, it is even worse than before the crisis,” he said. “As well-intentioned as the Dodd-Frank Act may be, it will not improve outcome.
(Excerpt) Read more at telegraph.co.uk ...
P!
I prefer we break up the federal reserve bank.
Always a good idea. Same for the big commercial banks!
Amen. But don’t hold your breath, unless your favorite color is blue.
Agreed. Restore Glass-Steagall first.Then limit the size of the big eight banks. B of A is too big. As is Citi, and JPM.
I have a better idea. SHUT DOWN THE FED!
They should right now re-impose the 1933 Glass-Steagall Act and give those Wall Street banks 18 months to separate out banking and investment operations. I mean think about it: the 1987 stock market crash and the 1997-1999 Asian financial crisis had little effect on the US economy because bank assets were not at risk due to Glass-Steagall in place.
He’s absolutely correct.
Unluckily for us, it seems like the big banks RUN the government.
Those big investment banks, along with their subsidiary the Fed, are essentially running the country. Don’t expect to see Washington do anything against them - ever.
Why O why did I read *must be blown up*?
yeah well..DC can do it...or We the People eventually WILL do it..
its a lot better than Dodd- Frank which in July we will start paying bank fees.
Given the power of modern computer systems there’s no reason why we couldn’t limit the brick and mortar side of banking to be limited to a single county ~ like things were a couple of decades ago.
Two years too late or better late than never?
No business to should allowed to become “to big to fail”, in fact that should be the very criteria for braking up a business.
There ya go again. Clouding the issue with common sense and logic!
This general concept is quite good for the economy because it encourages the development and divestiture of profitable organizations (institutions become incubators)...and that is good for the profitability of the divesting organization and good for overall competitiveness in the financial industry because small organizations are more creative and resourceful (all other things being equal).
Of course, the divestiture of unprofitable operations is also a good thing in that "one company's trash is another company's treasure."
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