How The Federal Reserve Is Pushing Big Banks To Break Themselves Up

The Federal Reserve isn’t forcing big banks to break up. But neither is the nation’s top financial regulator making it easy to be big.

On Thursday, two top Fed officials announced tough new requirements for the eight largest American banks, opening a new front in the Fed’s regulatory regime. The measures would force big banks to “fully internalize the risk” they pose to the financial system, Fed Gov. Jerome Powell said.

“I have not reached any conclusion that a particular bank needs to be broken up or anything like that,” Powell told attendees at a banking conference, according to the Wall Street Journal. Rather, the Fed would add pressure to financial institutions “to the point at which it becomes a question that banks have to ask themselves.”

In other words, Fed officials wouldn’t mind if the largest “too big to fail” banks split up. They just don’t want to get their hands dirty.

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