Bloomberg-
Federal Reserve Bank of Minneapolis President Neel Kashkari proposed a series of new rules for banks and non-bank lenders that he said would eliminate the threat posed by financial institutions whose failure could wreak havoc in the global markets.
The plan centers on significantly increasing the capital cushion banks must hold to protect against losses in a crisis. It also calls on the U.S. Treasury to determine which banks are “too big to fail” and face higher capital requirements. Finally, the plan would impose a tax on debt for large non-bank lenders and reduce the regulatory burden on community banks.
“We believe the Minneapolis Plan does a much better job of reducing risks at reasonable costs to society than current regulations” Kashkari said in a speech on Wednesday while introducing the proposals at the Economic Club of New York. “Ultimately, the public needs to make their own determination.”