Dallas Fed President: Break up the Banks, End 'Too Big to Fail

A recent report by the Federal Reserve Board of Dallas accuses the nation’s largest banks of being “a perversion of capitalism” and “a clear and present danger to the U.S. economy.”

The report titled "Choosing the Road to Prosperity Why We Must End Too Big to Fail—Now" goes on to say the infamous Dodd-Frank bill, which was supposed to "regulate" the financial industry, “may actually perpetuate an already dangerous trend of increasing banking industry concentration.”

JPMorgan, Bank of America, Citigroup, Wells Fargo and U.S. Bancorp, hold 52 percent of all U.S. deposits, according to the report, which makes that whole “too big to fail” problem seems a lot worse now than it did before Dodd-Frank.

In an effort to better understand the claims made in this report, PBS FRONTLINE interviewed the Dallas Fed CEO and president, former banker Richard W. Fisher.

According to Fisher, it's time to break up the banks and end "too big to fail."

Watch Fisher discuss the fact that so much in concentrated "in so few hands” (via PBS FRONTLINE):

“Dodd-Frank proposes to solve this problem by giving the government ‘resolution authority’ to dismantle a big bank, but Fisher suggests a better solution is to not allow banks to get so big,” PBS’ Sarah Moughty writes.

Watch Fisher discuss Dodd-Frank (via PBS FRONTLINE):

“Fisher argues that now is an ideal time to solve this problem. Regulators feared that aggressive steps to end the ‘too big to fail’ problem during the crisis would further destabilize an already delicate system,” Moughty writes.

“But now that the financial system is healthier, and the normal lending and borrowing that keeps the system liquid has been restored, the risks have lessened,” she adds.

According to Fisher, “liquidity is abundant” and the time is now to break up "too big to fail" (via PBS FRONTLINE):