A high profile and powerful member of the Federal Reserve’s Board of Governors, Daniel Tarullo, calls on Congress to cap the size of the nation’s financial firms. According o the Wall Street Journal this marks “one of the most high-profile challenges to the way Wall Street does business,” as Tarullo drives much of bank policy-making at the Fed, and is the highest-ranking regulatory official to call for limiting the size of banks.
“If larger banks continue to expand, Mr. Tarullo said in Wednesday’s speech, the market perception will increase that certain of them are ‘too big to fail,’ meaning the federal government would rescue them rather than rock the financial system.”