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Fed's Bullard-Must make banks smaller so they can fail if needed

ST. LOUIS, Oct 11 (Reuters) - Big U.S. banks should be reduced in size to make their future failure more manageable, a senior Federal Reserve official said on Thursday, supporting a suggestion that banks' size be limited to a specific percentage of U.S. gross domestic product.

"I'm very much of a view that 'too-big-to-fail' remains alive and well and the only way to really make progress on this issue is to get firms down to a smaller size, where you'd feel comfortable letting them fail if the situation arose," St. Louis Federal Reserve President James Bullard told reporters.

(Reporting by Alister Bull)

((alister.bull@thomsonreuters.com; +1-202-898-8392, Reuters Messaging: alister.bull.thomsonreuters.com@reuters.net))

Keywords: USA FED/BULLARD