Another Top Fed Official Calls For U.S. To Break Up Megabanks

Referring to the danger posed by megabanks as one that's able to spread "debilitating viruses throughout the financial world," a second top Federal Reserve official called for policymakers to bust up the nation's financial behemoths before they cause another worldwide financial crisis.

Richard W. Fisher, president and chief executive of the Federal Reserve Bank of Dallas, told a gathering of economists and financial experts Wednesday that "a truly effective restructuring of our regulatory system will have to neutralize what I consider to be the greatest threat to our financial system's stability... 'too big to fail'."

"In the past two decades, the biggest banks have grown significantly bigger," Fisher said in New York during a lunchtime speech that elicited rounds of applause. "The average size of U.S. banks relative to gross domestic product has risen threefold. The share of industry assets for the 10 largest banks climbed from almost 25 percent in 1990 to almost 60 percent in 2009.

"Existing rules and oversight are not up to the acute regulatory challenge imposed by the biggest banks," he said. So U.S. policymakers, along with their international counterparts, should come up with a system that will break them down into a manageable, less-risky size.<snip>

More at link: http://www.huffingtonpost.com/2010/04/14/another-top-fed-official_n_537934.html

Well worth the read. Fisher makes the case for this very effectively and debunks the arguments against it.

Thank you for posting this.

succeed:nuke: :kick: