Big Banks Were Trembling After Fed Testimony, Says Memo

Big banks trembled this week as U.S. Federal Reserve Governor Dan Tarullo before Senate Banking earlier this week and announced a tough set of new rules for the largest banks, according to a memo from Federal Financial Analytics.

“They should have been even more afraid: his written testimony takes Fed policy one step farther by declaring that the big banks must be safer than a small one,” the memo said.  The only way big banks can be safer than smaller ones is if they turn themselves into smaller ones, the memo noted, a reference to a...