Big Banks Were Trembling After Fed Testimony, Says Memo
By Mark Melin
Big banks trembled this week as U.S. Federal Reserve Governor Dan Tarullo before Senate Banking earlier this week and announced a tough set of new rules for the largest banks, according to a memo from Federal Financial Analytics. “They should have been even more afraid: his written testimony takes Fed policy one step farther by declaring that the big banks must be safer than a small one,” the memo said. The only way big banks can be safer than smaller ones is if they turn themselves into smaller ones, the memo noted, a reference to a movement to break apart the large banks and diffuse their destructive potential.