Fed Prez Hoenig: "Let Insolvent Banks Fail"

Fed Prez Hoenig Breaks From Bernanke: "Let Insolvent Banks Fail"

In a sign of potential discord among the Federal Reserve regional bank presidents, Kansas City Fed Chief Thomas Hoenig testified this morning before the Joint Economic Committee of Congress that 'too big to fail' is false. This is in distinct contrast with Fed Chairman Bernanke's stated objective of not allowing any large bank failures, though it seems likely B-52's statements on 60 minutes were meant to allay fears more than define policy. Economists Simon Johnson and Joseph Stiglitz testified alongside Hoenig before the JEC, and their comments echoed those of the Fed Governor (more)