FDIC’s Hoenig Says Banks May Revisit Pre-2008 Risky Behavior
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If big U.S. banks are not forced to sever their investment arms from traditional banking, they will return to behavior that led to the 2008 credit crisis, said Federal Deposit Insurance Corp. board member Thomas Hoenig.
“The behavior and practices leading to this crisis will soon reemerge and these highly complex, more vulnerable firms will have an even more devastating effect on the economy,” Hoenig said in remarks yesterday at the Exchequer Club in Washington. “Activities leading to the crisis continue today -- and continue to be subsidized -- well after the lessons should have been learned.”