Kansas City Fed's Hoenig Goes on the Offensive Against Big Banks
Kansas City Fed's Thomas Hoenig is railing on TBTF and it's funny to hear because his bank, naturally, supervises a not-so-surprising number of them: ZERO.
Market Ticker is thrilled that Hoenig has "grown a brain" but the guy was never stupid to begin with, he's the closest thing the FOMC has to a brainiac at this point. Then again, JDA is biased and loves a good shit disturber.
Federal Reserve Bank of Kansas City President Thomas Hoenig urged the U.S. to ban proprietary trading at banks and overhaul regulation to ensure a competitive financial system.
“We will not have a healthy financial system now or in the future without making fundamental changes that reverse the wrong-headed incentives, change behavior and reinforce the structure of our financial system,” Hoenig said in a speech today at the U.S. Chamber of Commerce in Washington.
Hoenig’s recommendations build on his proposals over the past year to let big U.S. banks fail. The Senate Banking Committee on March 22 approved Chairman Christopher Dodd’s financial-rules overhaul, which includes the proposed Volcker rule to ban proprietary trading and prohibit investment in and sponsorship of hedge funds and private-equity funds by banks.
“A credible resolution process, simple rules for leverage and loan-to-value limits, and the Volcker rule reforms will allow all banks to compete on an equitable basis,” Hoenig said at a conference on financial markets, hosted by the business group. “Reinstating these fundamental principles will enhance consumer, business and Main Street access to that most essential resource -- capital.”
So. HFT, bank trading, TBTF, and presumably that dark pool nonsense are all up for debate and Hoenig would be happy to see markets returned to normal and regulated to death. Sounds like a perfect plan except the Fed functions as a committee and do you really think the guy from Missouri who has no big banks under his watch is going to be allowed to make major changes to the financial code?
Me thinks not.