Architect of the 2008 U.S bank bailout says banks pose a nuclear threat
Adam Pike, News Editor
17 Feb 2016, 4:09 p.m.
U.S. regulators must consider breaking up the country’s largest banks as they represent a “nuclear” threat to the global economy according Neel Kashkari.
Neel Kashkari was Hank Poulson’s right hand man during the 2008 crisis and has been widely credited as the architect behind the 2008 bank bailouts. Kashkari’s warning comes as bank shares fall as the threat of a global recession increases.
Kashkari now the Head of the Minneapolis Fed, is calling for regulators to force Wall Street’s banks to hold greater reserves. In Kashkair’s opinion the biggest banks are still too big to fail and continue to pose a massive systematic risk to the economy.
In his first speech since being selected to the Federal Reserve, Kashkari attacked the banks for failing to change their current structure and accused them of failing to work with regulators.