Leading Wall Street firms should segment their riskiest businesses into holding companies that better shield taxpayers from a future bailout, said Tom Hoenig, vice-chair of the Federal Deposit Insurance Corporation (FDIC), according to Reuters. Hoenig pitched his idea to bankers attending an industry conference as a more palatable alternative to the regulatory regime which has existed since the Dodd-Frank financial legislation was enacted after the 2007-2008 financial crisis. Hoenig said that law has proved burdensome for all banks and has given those that are too big to fail a competitive advantage. Individual holding companies standing behind big bets on companies, infrastructure or other riskier projects would have higher capital requirements than consumer banks, under the proposal.
