Finally, a high ranking official at the Federal Reserve calling it like it is ...
Because of the 2008 bank bailouts, and other implicit guarantees, Kansas City Federal Reserve President Thomas Hoenig is arguing that the largest U.S. banks are really little more than government-guaranteed enterprises, just like mortgage finance companies Fannie Mae and Freddie Mac.
"That's what they are," Hoenig said at the National Association of Attorneys General 2011 conference.
As such, Hoenig believes that these banks should be restricted to commercial banking activities, and that's it. He argues that the banks should return to the activities that they performed before reckless deregulation allowed commercial banks to engage in investment banking and other speculative activities.
This isn't the first time Hoenig has spoken out about our nation's banking system. In February (2011) Hoenig said that Wall Street's financial giants continue to pose major risks to the U.S. economy, and must be broken up to avoid another meltdown.
Because of their implicit "too-big-to-fail" guarantees Hoenig argues that our bailed out banks should be treated as "a public utility" instead of like the pampered and taxpayer guaranteed institutions that they've become.
I couldn't have said it better.
- Mark
Because of the 2008 bank bailouts, and other implicit guarantees, Kansas City Federal Reserve President Thomas Hoenig is arguing that the largest U.S. banks are really little more than government-guaranteed enterprises, just like mortgage finance companies Fannie Mae and Freddie Mac.
"That's what they are," Hoenig said at the National Association of Attorneys General 2011 conference.
As such, Hoenig believes that these banks should be restricted to commercial banking activities, and that's it. He argues that the banks should return to the activities that they performed before reckless deregulation allowed commercial banks to engage in investment banking and other speculative activities.
This isn't the first time Hoenig has spoken out about our nation's banking system. In February (2011) Hoenig said that Wall Street's financial giants continue to pose major risks to the U.S. economy, and must be broken up to avoid another meltdown.
Because of their implicit "too-big-to-fail" guarantees Hoenig argues that our bailed out banks should be treated as "a public utility" instead of like the pampered and taxpayer guaranteed institutions that they've become.
I couldn't have said it better.
- Mark
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