This guy thinks banks are STILL too big to fail. And he's not Bernie Sanders
This guy thinks banks are STILL too big to fail. And he's not Bernie Sanders
by Heather Long - April 18, 2016: 6:26 PM ET
"I continue to think that the largest banks in the country are too big to fail."
That might sound like a Bernie Sanders sound bite, but it's actually from a speech that the Federal Reserve Bank of Minneapolis president gave Monday.
Nearly eight years after the financial crisis shocked the global economy and caused a massive recession, the consensus view is that big Wall Street banks are a lot safer now.
But are they safe enough?
"I am skeptical that current efforts to fix that problem will ultimately work," said Neel Kashkari, the head of the Minneapolis Fed.
It's unusual to hear someone from within the Fed be so critical of Wall Street regulation, since the Fed is one of the main watchdogs over big banks. Earlier this month Fed chair Janet Yellen defended all the ways regulators like the Fed have made the system safer.
~Snip~
Kashkari believes there are actually four possible ways to prevent another financial crisis. Breaking up the banks is just one option. Here are Kashkari's ideas:
1. Break up the banks
2. Make banks hold even more money on hand
3. Put a tax on investments that banks make using borrowed money (i.e. leverage)
4. Allow institutions to go bankrupt
