Fed’s Kashkari Says Odds of Another Crisis at 67%

Tougher banking regulations put into effect since the Great Recession have lowered the chances of another financial crisis, but they odds are still much too high, Minneapolis Federal Reserve President Neel Kashkari told CNBC on Thursday.

Based on an analysis of data from the International Monetary Fund on past crises, Kashkari said on “Squawk Box” the odds of another bust over the next century are now 67 percent, down from 84 percent.

“I think if most Americans knew that they’d say that’s ridiculous. That’s much too high,” he said.

Kashkari, who unsuccessfully ran as a Republican for governor of California in 2014, was the administrator of TARP, the Troubled Asset Relief Program, at the Treasury Department during the 2008 financial crisis.

After leaving Washington, Kashkari joined Pimco as a managing director and head of global equities. Before his time at treasury, he was a vice president at Goldman Sachs.

On Wednesday, Kashkari unveiled a plan aimed at preventing future government bailouts by forcing the largest U.S. banks to hold so much capital that they would probably decide to break up into smaller parts.

The set of regulations introduced since the crisis known as Dodd-Frank, did not go far enough, he added.

via CNBC

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Alfonso Esparza

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.
Alfonso Esparza