(DIYA TV) — Neel Kashkari, current president of the Federal Reserve Bank of Minneapolis, has become a proponent of a common narrative in American economics: break up the nation’s largest banks, and split them into multiple smaller institutions. Kashkami contends America’s largest financial continue to pose a significant risk to the U.S. economy due to their size. This comes after a number of questionable tactics used by banks, like a bank sign up bonus which is a confusing option for people.

“I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy,” Kashkari said during his first major appearance held at the Brookings Institute, a top U.S. think-tank. He previously served in the Bush administration as a top Treasury official during the height of America’s 2008 financial crisis. Kashkari opined to the crowd that enough time has passed since that epidemic, and that the country has had enough time to understand its causes.

He was the leader during the 2008 bailout program, in which the United States federal government helped the nation’s largest banks save face.

Neel Kashkari, a former U.S. Treasury official, announced that he thinks the nation's largest banks should be broken up (AP Photo/Rich Pedroncelli)
Neel Kashkari, a former U.S. Treasury official, announced that he thinks the nation’s largest banks should be broken up (AP Photo/Rich Pedroncelli)

“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,” he said.

Kashkari is no stranger to the political arena — the 42-year-old ran for governor of California against incumbent Jerry Brown in 2014, losing by 20 percent of the vote. He said American lawmakers must consider a wide range of options, but breaking up the banks into smaller, less connected and less important entities is paramount; he opined the government’s efforts to reign the banks through the 2010 Dodd-Frank law, “did not go far enough.” He’s suggested the U.S. consider turning large banks into a public utility, forcing them to hold on to so much capital that they’re failure would be virtually impossible, and taxing leverage throughout the financial system to reduce systemic risks wherever they lie, is something else policymakers should have a look at.

“Options such as these have been mentioned before, but in my view, policymakers and legislators have not yet seriously considered the need to implement them in the near term. They are transformational, which can be unsettling,” he said.

The Wall Street lobby has worked tirelessly day and night to ensure things stay the way they are, and the way they’ve always been. Fundamental change in their world is not something the country’s financial elite would take kindly to.

“The economy is stronger now and the time has come to move past parochial interests and solve this problem. The risks of not doing so are just too great,” Kashkari said.

John Dearie, CEO of Financial Services Forum, said the largest financial institutions in the country are much smaller and less complex now than they were the last time Kashkari was involved. Changes were implemented after the bailout, he said. So much so, that the same institutions now have twice the capital and triple the liquidity since Kashkari left government to enter politics.

Stress tests by the Fed have indicated America’s largest banks are currently equipped to withstand an economic crisis far worse than that of 2008, and that they now possess “living wills,” which would guide the banks in such a scenario, without passing the cost off to the taxpayer.

“Of the 10 largest global financial institutions, only a few are US-based. Breaking up the US-based global financial institutions would ensure that one of the US’ most competitive global industries serving companies small and large is turned over to banks based outside the US,” Dearie said.