Top Fed Official Supports Restricting Banks' Derivatives Bets, Goes FURTHER Than Obama

First Posted: 06-10-10 08:35 PM | Updated: 06-11-10 12:46 AM

The top fiscal hawk and longest-serving policy maker in the Federal Reserve supports limiting banks' derivatives activities, a potential blow to Wall Street megabanks that use their taxpayer support to trade the kind of risky financial products that nearly brought down the global financial system.

In a letter of support, Federal Reserve Bank of Kansas City President Thomas M. Hoenig endorsed a Senate provision Thursday that would force banks to strip their swaps desks out from their depository institutions, calling it "of utmost importance to our nation's long-term financial and economic stability."