Feds Lacker Says New Laws Need for Too-Big-To-Fail Banks

February 12, 2014 Share Print 0

Calling too-big-to-fail banks “the most critical issue facing our financial system,” a top Federal Reserve official on Tuesday urged new laws to address the problem, including ending Fed emergency lending powers.

“During the crisis, and still today, many people view government-provided backstops to large financial firms as a necessity to prevent financial system malfunctions,” Richmond Federal Reserve President Jeffrey Lacker said in remarks prepared for delivery to the Stanford Institute for Economic Policy Research.
But so long as those backstops are seen as available, he argued, investors will continue to take risks they would not otherwise take, making the financial system less, not more, stable.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.