Dallas Fed Chief Calls for Breakup of 'Too Big to Fail' Banks

By Tim Connolly

Dallas Federal Reserve Bank President Richard Fisher is calling for the breakup of banks too big to fail; and at Winning Strategies, we believe this is an idea whose time has come.

Federal Reserve Bank of Dallas President Richard Fisher traveled to New York to trumpet a message he's told Texas audiences before: Banks that are too big to fail are too big to exist in the first place. Speaking Wednesday at the Council on Foreign Relations, Fisher said big, systemically important banks should be dismantled before regulators have to deal with another crisis like the one that nearly brought down Wall Street and the rest of the U.S. financial system in late 2008. "The dangers posed by too-big-to-fail banks are too great," he said. Fed Chairman Ben Bernanke and others have said Congress should pass a law giving regulators "resolution authority" to close down failing financial companies. But Fisher, acknowledging that his views might be "slightly radical," called for an international agreement to break giant banks into more manageable pieces. [more…]