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Minneapolis Fed President Neel Kashkari speaking in a question and answer session took on the banks being too big to fail and capital requirements for America's biggest banks should be doubled.

Fed Kashkari

 Neel Kashkari - Winning Friends and Influencing People

He also addressed low inflation has been happening everywhere, not just in the US. He sees the risk that it will be too low. Interestingly this flowed from his talk of banks capital ratios and risk. From where I sit he is saying the banks have continued even further with their ways and with all the bailout monies there is no inflation and therefore no stimulis from the economy outside their world.

He opined that his former bank friends are not happy with him and while at it he fired a shot at economists saying surveys of economists' inflation expectations not very useful. This would be a reference to the Fed's so called dot plots.

"Basically we need to double the capital requirement of the biggest dozen banks in America. If we made banks put 20 percent down in terms of equity on their own portfolio, we would basically protect taxpayers against future bailouts. Right now they have about half the equity they need," Kashkari said

At least he addresses risk whilst most Fed Governors (and politicians don't, they jsut slap each other's backs when times are good. Scary when you consider stocks are at all time highs.

We can't control everything, but if we can identify the risks, do the analysis, put forward sensible solutions, then other legislators and policymakers can take it forward."

For mine its good that bankers are angry with him, that suggests he is nipping at the right heals. Answering questions about said bankers he said;

"Some have expelled me. Some of my good friends are really angry that I came out and said the biggest banks are too big to fail."

Source: CNBC

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