Following news this week that JPMorgan Chaselost $2 billion on a bad hedging strategy, former FDIC Chairman Bill Isaac on Friday urged U.S policies to prevent banks that are “too big to fail.”
“I would agree that we have a number of banks in the country that are just too big to fail, as they generally don’t get in trouble alone; they get in trouble at the same time,” he said on CNBC’s “The Kudlow Report.”
Isaac, who previously led the Federal Deposit Insurance Corporation and now chairs Fifth Third Bancorp, described the banking industry’s delicate balance.
“They comprise about half the economy, about half the financial system, so we really can’t let these banks fail right now,” he said. “What we do about it is a very different issue. I frankly think that if we had the right regulatory policies in place, these banks wouldn’t dominate the way they do now.”