"The dictatorship of the Fed on the regulatory side has basically taken away capitalism," Bove said in an interview on "Squawk Box." "The Fed makes the decision of what the cost of money should be. It makes the decision of what the quantity of money should be."
The increased central bank oversight since the 2008 financial crisis has in effect nationalized the banks, he argued, noting banks are sitting on "staggering amounts" of money they can't lend "because presumably the borrowers don't want it."
The regulations put in place by the Dodd-Frank Wall Street Reform Act have caused the velocity of money in the U.S. to decline, Bove said, a trend he sees as hurting the U.S. economy and resulting in "tens of thousand" job cuts and branch closures in the financial sector.
"The banks have been forced to siphon staggering amounts of money in the coffers of the U.S. government, directly and through the Federal Reserve, as a result of all these regulations being thrown at them," he added.