Breaking up too-big banks still not the answer -Fed's Dudley
NEW YORK, Nov. 15
NEW YORK, Nov. 15 (Reuters) - There remains much work to fix the "too big to fail" bank problem, but breaking up big financial institutions is still not the answer, said an influential U.S. Federal Reserve official.
In a speech Thursday evening, New York Fed President William Dudley took on those who would simply break up big banks and abandon the more measured approach taken in the 2010 Dodd-Frank financial reform bill, which reduces the likelihood of banks failing and lessens the cost to society if they do.
"Too big to fail is an unacceptable regime. The good news is there are many efforts underway to address this problem. The bad news is that some of these efforts are just in their nascent stages," Dudley was to tell a gathering of finance professionals, according to prepared remarks.
While breaking up too-big-to-fail banks "could yet prove necessary," he added, "it is premature to give up on the current approach: changing the incentives facing large and complex firms, forcing them to become more resilient, and making the financial system more robust to their failure."