“Thomas Hoenig, vice chair of the Federal Deposit Insurance Corp., said Monday the issue of “too big too fail” remains a risk to the U.S. economy and more work needs to be done on banking regulations following the 2008 financial crisis.”
“While much has been done, Hoenig said in a speech at the National Association for Business Economics’ annual policy conference, ‘much remains undone and I suspect that 2014 will prove to be a critical juncture for determining the future of the banking industry and the role of regulators within that industry,’”
“But it won’t be easy. ‘The inertia around the status quo is a powerful force, and with the passage of time and fading memories, change becomes evermore difficult,’ he said.”
“Hoenig, who previously served as president of the Kansas City Federal Reserve Bank, said work on orderly liquidation resolution planning is still needed because “‘too big to fail’ remains a threat to economic stability.’”
“Hoenig added if even one of the top five banks in the U.S. fails ‘it would devastate markets and the economy.’”
Read full MNI article here.