Neel Kashkari: Only Reason Wall Street Survived Is Because the American People Stepped In

Minneapolis Federal Reserve President Neel Kashkari shares his concerns with Maria Bartiromo on why some big U.S. banks are still too big to fail and Federal Reserve policy.

NEEL KASHKARI: There are a number of transformational solutions out there. Everything from breaking up the banks to putting so much capital in them that you turn them into a utility so they virtually can't fail to taxing leverage across the financial system. In the immediate aftermath of the crisis, when Congress debated Dodd-Frank, I think they basically took the transformational solutions off the table. They said, "Now is not the right time. Fix what we've got." Well, here we are, seven years later, and I'm saying the biggest banks are still too big to fail. We do need to take transformational actions and we in Minneapolis are going to bring experts together from around the country. Put all the options on the table and give Congress a chance to weigh in and hopefully go further.

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MARIA BARTIROMO: Basically, [J.P. Morgan] bailed out the government. Is that a misstatement?


KASHKARI: I think that's a misstatement. I think that some of the big banks said, "Well, we were so strong, we didn't need it." First of all, some of the banks were begging for help.

BARTIROMO: Not J.P. Morgan.

KASHKARI: If all of J.P. Morgan's major trading partners had gone in bankruptcy because the U.S. taxpayers didn't step in, how would J.P. Morgan be doing? You know, this is ridiculous.

That's only because the federal government and the taxpayers stepped in. So when Jamie Dimon says "We were always so strong," but if all of their counterparties were in bankruptcy, forget it. The only reason Wall Street survived is because the American people stepped in.