Head Of Mpls. Fed Calls For Breaking Up Big Banks; Sanders Applauds

MINNEAPOLIS (WCCO) – White House hopeful Bernie Sanders is praising the head of the Federal Reserve Bank of Minneapolis after he called for putting an end to banks that are too big to fail and recommended breaking them up.

In a speech Tuesday at the Brooking Institution in Washington D.C., Neel Kashkari, who administered the 2008 bank bailout fund and is now the president of the Minneapolis Fed, said that transformational steps need to be taken to make sure the country's economy isn't severely compromised in the event of a big bank going under.

Proposals he put forward included: breaking up large banks into smaller entities, turning big banks into public entities so that they effectively can't fail, and taxing leverage throughout the financial system to reduce risks.

Sanders applauded Kashkari's ideas, adding that the country can't risk another bailout like what happened in 2008.

"Wall Street cannot continue to be an island unto itself, gambling trillions in risky financial instruments, making huge profits, assured that, if their schemes fail, the taxpayers will be there to bail them out," the self-described democratic socialist said in a statement.

Under Kashkari's leadership, the Minneapolis Fed will hold a series of symposiums this year on options to deal with the too big to fail problem. By the year's end, a plan will be released with recommendations of what to do moving forward.