Kashkari, who oversaw the 2008 bank bailouts as a then-Treasury official, has been outspoken in favor of higher capital requirements since he took over at the Minneapolis Fed in 2016. The U.S. central bank has instead relaxed some regulations since then under the direction of officials appointed to the Fed’s Board of Governors in Washington by President Trump.
“We are going in the wrong direction,” Kashkari said. “I think we should be tougher. I think we should have higher capital requirements on the biggest banks.”
The Minneapolis Fed chief praised Lael Brainard, the lone Fed governor to be appointed to her current position by President Barack Obama, for speaking out against the majority in favor of tougher measures. Brainard is reportedly under consideration as a possible future Treasury secretary if Democratic presidential nominee Joe Biden wins the Nov. 3 election.
No I am not making this stuff up.
The Fed governors have already warned about a decade of Fed remits back to Treasury, collected as a tax on bank collateral. Kashkari is warning banks to be tax collectors. His capital requirements increase is needed to spread the large tax around as widely as possible. Kashkari is the problem. He wants to go on some infinite hunt for tax dodgers because that is all he is seeing.
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