Delamaide: Fed aide goes rogue in attack on banks
Source: USA Today
WASHINGTON — No one really expected a former Goldman Sachs executive who describes himself as a free market libertarian to make headlines with measures against the banks that are even tougher than those put forward by Bernie Sanders or Elizabeth Warren. But Neel Kashkari, who was Treasury Secretary Hank Paulson’s point man on the bank bailout when the financial crisis broke in 2008, is not your typical Goldman Sachs alum. The former Treasury official and candidate for governor of California, currently the head of one of the regional Federal Reserve Banks, proposed last week to break up the banks and to regulate them as strictly as nuclear utilities.
His call for action came as Wall Street abuses have become a central focus in the Democratic primary campaign, with Vermont’s Sen. Sanders hammering away at this theme and forcing front-runner Hillary Clinton to also talk tough about reforming the financial industry.
Kashkari, the 42-year-old son of Hindu immigrants from Kashmir, trained as a mechanical engineer and worked on a space telescope in his first job. Only after obtaining an MBA from Wharton did he leverage his engineering expertise to get a job with Goldman in Silicon Valley.
Never a wallflower, Kashkari contacted former Goldman chief executive Hank Paulson after he was named Treasury secretary in 2006, seeking a job in government even though he hardly knew his former boss. But before you could say “Jack be nimble,” there he was in Washington as assistant Treasury secretary running the bank bailout, officially known as the Troubled Asset Relief Program, or TARP.
It is that unique experience that Kashkari drew on last week when as the newly installed president of the Minneapolis Federal Reserve Bank he launched a broadside against the banks. In a speech at the prestigious Brookings Institution, Kashkari said that the Dodd-Frank financial reform passed in the wake of the financial crisis did not go far enough to solve the problem of “too big to fail (TBTF)". “I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy,” Kashkari said in Washington. “Now is the right time for Congress to consider going further than Dodd-Frank with bold, transformational solutions to solve this problem once and for all.”
Read more: http://www.usatoday.com/story/money/2016/02/23/delamaide-fed-aide-goes-rogue-attack-banks-wall-street-money/80802170/
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