Regional Fed Reserve board members, meaning the Fed Banks that arent Richmond, San Franciso and New York, are growingly concerned by what I think could be best termed the clique factor.

Dallas Fed exec Richard Fisher is calling for a nuclear option to unwind unwieldy and overwroght banks termed “too big to fail”.

Money quote:

Unfortunately for our banking regulation system, critics in the regional Federal Reserve banks haven’t had much influence on regulatory policy.

One reason is that the regional Fed officials seem to be talking their own book, or can be dismissed as doing so. Outside of New York, San Francisco and Richmond, Va., the regional Feds oversee only the small and midsize banks that compete with the “too big to fail” banks. The small guys suffer when the big banks are unfairly subsidized by the government, so the regional Feds can be brushed off as merely cheerleading for their team.