President James Bullard Addresses Questions on Regulatory Reform Proposals - Part 1: Do you support capping the size of financial firms?

May 10, 2010


Do you support capping the size of financial firms?

I think one of the unfortunate things in this crisis was you had big firms that were unmanageable and they merged and became even bigger and more unmanageable. I would actually support—some people are suggesting size restrictions in the legislation and sort of hard caps of various kinds in the legislation—I'd support that, because I think there is a tendency for the firms to get too big, too unmanageable, and then you kind of don't know what to do with them from a public policy perspective. I think if you put some hard limits on them, then the CEO would have to think about, "Okay, I'm coming up against this limit; which businesses do I want to sell off in order to keep under the size restriction?" I think that that's a reasonable way to go, actually.