Minneapolis Fed Chief Urges Breaking Up Big Banks

What's Hot

2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

A top banker warns that the Dodd-Frank Act did not go far enough to prevent the risks posed by "Too Big to Fail" banks.

Big banks are still too big, according to Neel Kashkari, president of the Federal Reserve Bank of Minneapolis. Speaking at a recent Brookings Institution event, Kashkari said the Dodd-Frank Act, passed in the wake of the Great Recession of 2007-2009, didn’t go far enough in the new regulations it created.

Kashkari knows a few things about dealing with the recession. He headed the Troubled Asset Relief Program (TARP) from 2008-2009 under Presidents George W. Bush and Barack Obama. The program, which bought up questionable assets from banks, was a central part of the federal government’s efforts to respond to the economic crisis.

At the Brookings symposium, he argued that while the recession had many causes, the existence of the “Too Big to Fail” banks made things worse. The phrase “Too Big to Fail” refers to a handful of banks that are so large and deeply ingrained into the financial system that their failure would be catastrophic for the national, and possibly global, economy.

Kashkari has joined the ranks of others on both sides of the political spectrum who say these banks need to be broken up now, while the economy is relatively stable, to make sure the problem doesn’t resurface.

Donald Kohn, a Brookings senior fellow and former member of the Federal Reserve Board disagreed with Kashkari. He said Dodd-Frank created proper controls that allow the unwinding of complex financial institutions that are close to failing. He said that further government intervention in private business would be unjustified unless he could see more evidence that the new fail-safe programs wouldn’t work.

See the discussion for yourself here.

Are some banks too big, or should the government keep its hands off? Let us know in the comments or weigh in on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: House Hunters: Beware of These 6 Mortgage Mistakes

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,041 more deals!