US Fed talks banking break up
America's biggest banks "are still too big to fail and continue to pose a significant, ongoing risk to our economy," Neel Kashkari, the new president of the US Federal Reserve Bank of Minneapolis, told a forum of the Brookings Institution this week. Kashkari described the threat of another crisis that might force the US Government to bail out large banks, as it did in 2008, as a rare instance of a clear and preventable problem.Kashkari outlined a number of potential options for restraining large banks, the New York Times reports.The first is forcing large banks to break into smaller pieces.Alternatively, the government could limit risk-taking by increasing the share of funding banks must raise in the form of capital rather than borrowed money, he said.Kashkari compared this to the safeguards imposed on nuclear power plants, where failure is regarded as unacceptable.