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Richard Fisher president of the Federal Reserve Bank of Dallas a pleasure to see again Richard thanks for coming -- Thank you David now to see you you Warren in a recent editorial about too big to fail banks banks that are becoming.
More concentrated than ever but isn't that precisely.
What the Dodd-Frank regulations were supposed to change.
You're right you're referring to our annual report of the Federal Reserve Bank of Dallas we just issued yesterday it's -- -- -- dot org.
It's a very thorough conversation.
In an essay written -- -- partner Rosenblum who's the head of our research department a forty year veteran of -- and about where the former president national association of this economist is a serious -- Picking up on many of the themes that I've spoken about and several speeches.
And we have ended up with greater concentration.
In the hands of the five big banks about 52% of all the banking assets.
Then before the crisis Lou Dobbs fails Dodd Frank's explicit purpose is to do it too big to fail so.
We we reach a radical conclusion David which is our best.
-- and this is purely that Federal Reserve -- analysis.
In the end we're gonna have to break up these institutions it's on American to have that much concentration and inhibits.
The functioning of monetary policy in terms of money -- you know -- through this accommodation try to get out to the system.
And it now you know our society is based on.
-- if you if you fail you fail then government shouldn't be subsidizing institutions.
-- -- have done great damage be that may present systemic risk going forward.
And I just think there's too much concentration in the industry and it shouldn't be more there should be last season and our taxpayers and depositors shouldn't be hostage.
Two institutions that are too big to fail we saw this happen before I certainly don't wanna be put -- position again what what's.
Say is extraordinary and I want to get to specifics about how.
You would break up some of these too big to -- -- to fail banks but you say in in your editorial about this report that.
The overall -- -- overarching purpose of Dodd Frank's was to avoid the too big to fail.
If if Dodd-Frank.
Has failed in its overarching purpose.
Isn't Dodd-Frank a fairly.
I guess for others to judge but I would say that it is a status stated purpose in the very front of the legislation.
To -- too big to fail.
It's extremely -- it's extremely complex.
New bodies have been created we hope they work there's the financial stability oversight.
Counselor committee called -- -- where the sector of the try -- -- the chairman of sudden sauter and the other regulators deeply involved.
But the evidence shows that thus far there's more concentration -- -- -- We know the engine of the economy is not working on all cylinders we -- -- yes -- the one of those that it cylinders that fails to work and is clogging up.
The automobile moving forward of job creation and greater prosperity is -- fact we still have these lingering gigantic institutions that are extremely inefficient.
And David are subsidized and that they have a lower cost of funds.
By virtue of their size they're putting smaller banks at a disadvantage.
And it's just.
Anti competitive this is not the way our system as well Richard if you're not gonna say I am I mean -- Dodd-Frank has failed to do its principal purpose for being that Dodd-Frank has failed.
Is it too late.
To change -- because a lot of the rules and regs of Dodd-Frank have yet to be filled that.
Well I think that's issue now in the rules ranks but the practice of Dodd-Frank the Fed is hard at work on.
To find in the new capital standards for all institutions want to make sure by the way that it doesn't hamper the smaller community and regional banks.
Of which are almost 6000 government the country the ones who couldn't afford the fancy lawyers in the lobbyists to get the -- -- -- some of the big banks get.
Exactly so again we have five banks with 52% of the assets if you -- another five Europe -- -- the sixties something's wrong David so.
I don't wanna be specifically critic about Dodd-Frank depends on how they implement it.
But I do believe you can break these institutions up there's a whole industry in this country it is an expert.
And terms of buying assets.
Taking companies apart selling off the pieces and the some of the pieces.
-- is greater than the whole and and secondly you remove the risk.
Of these behemoths.
Putting the taxpayer has hostage when they get into trouble there have been no question -- -- devil's in the --