The Federal Reserve’s longest-serving policymaker in a speech Monday voiced his belief that Dodd-Frank regulations designed to prevent future financial bailouts will not be effective and may even be watered down in years to come.
Federal Reserve Bank of Kansas City President Thomas Hoenig has been warning about the emergence of too-big-to-fail banks for more than a decade, according to the Huffington Post.
“For Hoenig though, the choice is clear when it comes to what to do with the financial institutions that caused the most punishing downturn since the Great Depression: break them up into pieces that regulators can understand and provide a backstop to entities engaged in the so-called real economy — but allow those dabbling in more risk-laden activities to fail,” reports the website.
Hoenig believes Washington made a mistake by passing the Dodd-Frank financial regulation law, according to the Huffington Post.
“Following this financial crisis, Congress and the administration turned to the work of repair and reform,” he said during his speech. “Once again, the American public got the standard remedies — more and increasingly complex regulation and supervision.”
Click here to read Hoenig’s entire speech.
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