WASHINGTON — A Federal Reserve official who played a key role in the government’s response to the 2008 financial crisis says the government should do more to prevent a repeat of that crisis, including considering whether the nation’s biggest banks need to be broken up.

Neel Kashkari, the president of the Fed’s Minneapolis regional bank, said Tuesday that while significant progress has been made to strengthen the financial system since the 2008 crisis, Congress did not go far enough in making changes.

“I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy,” Kashkari said in a speech to a conference at the Brookings Institution.

Kashkari, as an adviser to then-Treasury Secretary Henry Paulson, was a key architect of the Bush administration’s effort to deal with the 2008 financial crisis. He served as the first head of the Troubled Asset Relief Program, the $700 billion bailout program that Congress created at the urging of the Bush administration.

His comments about breaking up the nation’s biggest banks addressed a proposal Sen. Bernie Sanders of Vermont has been pushing in his Democratic presidential campaign.

Kashkari did not endorse such a move but he said the idea of breaking up the largest banks into smaller, less connected, less important entities should be studied.

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He also suggested studying proposals to turn large banks essentially into the equivalent of public utilities by forcing them to hold so much capital that they virtually could not fail. He compared this approach to the type of regulations that govern nuclear power plants.

Given the millions of people who lost jobs and the trillions of dollars in wealth that were wiped out during the 2008 crisis, it is critical that the country do more to prevent a repeat of what was the worst financial crisis since the 1930s, he said.

Kashkari said he planned to direct staff at the Minneapolis Fed bank to conduct a study in coming months on these ideas and produce a report with recommendations by the end of this year for consideration by banking regulators and Congress.

Before being tapped last year for the Minneapolis Fed job, Kashkari had been a managing director at bond giant PIMCO. A Republican, Kashkari ran unsuccessfully in 2014 for governor of California against Democratic Gov. Jerry Brown.

Kashkari said that the Dodd-Frank Act passed by Congress in 2010 in response to the financial crisis had made a number of significant improvements in banking regulation, but he said the law did not go far enough.

“I believe we must seriously consider bolder, transformational options,” he said. “The risks of not doing so are just too great.”

Republicans in Congress, supported by the financial industry, have launched a number of efforts to roll back different sections of the Dodd-Frank law. Lawmakers in both parties have contended that Dodd- Frank did not adequately address the problem of institutions that are considered too big to fail, thus forcing taxpayers to rescue them rather than face catastrophic consequences to the entire financial system similar to what occurred when Lehman Brothers collapsed in September 2008.


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