Efforts to prevent another fiscal crisis seem to be more “rhetoric” than “substance and necessary reform,” Federal Reserve Bank of Kansas City president Thomas Hoenig said yesterday.
“As a nation, we have violated the central tenants of any successful system. We have seen the formation of a powerful group of financial firms. We have inadvertently granted them implied guarantees and favors, and we have suffered the consequences,” he told a U.S. Chamber of Commerce conference, according to prepared text of his remarks released by the Fed.
“We must correct these violations. We must reinvigorate fair competition within our system in a culture of business ethics that operates under the rule of law,” Hoenig declared. “When we do this, we will not eliminate the small businesses’ need for capital, but we will make access to capital once again earned, as it should be.”
He said part of the problem was allowing banks to get too big to fail.