Kansas City Federal Reserve Bank president Thomas Hoenig said yesterday that “an enormous burden” has been placed on monetary policy and that in future crises there needs to be less reliance on the Fed. He spoke at an Institute of International Bankers conference in New York City

Hoenig expressed concern that the Fed and other central banks may be running the risk of “subsidizing” access to liquidity for “a growing list of borrowers” and suggested steps be taken to limit access in the future.

Hoenig, a former senior bank supervisor for the Kansas City Fed, also called for a “comprehensive look” at reforming the financial system and its regulation. Among other things, he expressed strong skepticism about the current regime of risk-based capital standards and argued for “simple leverage standards.”

— Market News International

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