The nation’s biggest banks remain too big to fail and pose significant risk to the economy, said Neel Kashkari in his debut speech as the president of the Minneapolis Fed on Tuesday.
“While significant progress has been made to strengthen our financial system, I believe the [Dodd-Frank] Act did not go far enough,” Kashkari said in a speech at the Brookings Institution.
Congress must take further action to strengthen the financial sector, he said.
Kashkari said that policymakers must give serious consideration to breaking up banks. Another idea is to turn large banks into public utilities “by forcing them to hold so much capital that they virtually can’t fail.”
Another idea is to tax leverage throughout the financial system “to reduce systemic risks wherever they lie,” he said.