The Federal Open Market Committee should have voted to taper its asset purchases at its meeting last week, according to Federal Reserve Bank of Dallas President and CEO Richard W. Fisher.
"Today, I will simply say that I disagreed with the decision of the committee and argued against it," Fisher said in speech in San Antonio Monday, according to prepared text released by the Fed. During the policy "go round" when Chairman Ben Bernanke asked for his views on tapering, Fisher said he told Bernanke, "Doing nothing at this meeting would increase uncertainty about the future conduct of policy and call the credibility of our communications into question."
Fisher said, "I believe that is exactly what has occurred, though I take no pleasure in saying so."
Additionally, Fisher argued that action is needed on too big to fail financial institutions, also known as systemically important financial institutions, since they "might easily again play the nefarious role they did five years ago in bringing down our economic and financial system."
While suggesting "many causes and tripwires" played a role in the financial crisis, "the TBTF behemoths were indisputably 'super-spreaders' of the virus that brought our financial system and economy to its knees. They retain that potential today. For in the aftermath of the crisis and the passage of Dodd-Frank, the giants have gotten bigger, and the profitability of the community and regional banks that might pose meaningful, healthy competition has been undermined by the legislation's complexity."