Critic of Biggest Banks Poised to Get FDIC Job
Until his retirement last month, Thomas Hoenig was a consistent thorn in Ben Bernanke's side, voting against the Federal Reserve chairman's easy-money policies at each of the central bank's eight policy-making meetings in 2010.</br></br>Now, Mr. Hoenig, the former Kansas City Fed president, is likely to become a thorn for the nation's biggest banks.</br></br>In a rare display of bipartisanship, the Senate appears likely to easily confirm Mr. Hoenig to a six-year term as the vice chairman of the Federal Deposit Insurance Corp., an agency that gained significant powers over the nation's biggest banks under last year's Dodd-Frank financial overhaul. Mr. Hoenig breezed through his confirmation hearing Thursday, lauded by senators from both parties.</br></br>The choice has rattled Wall Street executives. Mr. Hoenig believes some banks are so big that they are a risk to the financial system, and that taxpayers might need to bail them out in the future, just as they rescued big financial firms in the 2008 crisis.</br></br>Mr. Hoenig believes there is only one way to end this phenomenon of "too big to fail." "We must break up the largest banks," he said in a February speech, arguing that regulators could do so by restricting the activities of government-backed banks "and significantly narrowing the scope of institutions that are now more powerful and more of a threat to our capitalistic system than prior to the crisis."