Fed official suggests banking firewall isn’t needed

Tarullo said changes to Glass-Steagall made nearly 15 years ago were a "lost opportunity" to respond to the changing dynamic in the banking industry at the time. 

He argued that while there have been important steps taken since the financial crisis nearly five years ago to inject more stability into the financial system, including requiring banks to hold more capital, there are still other reforms yet to be made that can further bolster the industry. 

“My own view is that we still do need to do more to get to the point at which the risks posed by some of these institutions are confined to what we would think of manageable proportions,” he said. 

A bipartisan group of four senators — Elizabeth WarrenElizabeth Ann WarrenMulvaney aims to cement CFPB legacy by ensuring successor's confirmation Trump calls Nevada Dem Senate candidate 'Wacky Jacky,' renews 'Pocahontas' jab at Warren On The Money — Sponsored by Prudential — Trump floats tariffs on European cars | Nikki Haley slams UN report on US poverty | Will tax law help GOP? It's a mystery MORE (D-Mass.), Maria CantwellMaria Elaine CantwellTrump rips media for not covering 'permanent separations' by undocumented immigrants Energy commission sees no national security risk from coal plant closures OPEC and Russia may raise oil output under pressure from Trump MORE (D-Wash.), John McCainJohn Sidney McCainMulvaney aims to cement CFPB legacy by ensuring successor's confirmation Trump mocks McCain at Nevada rally Don’t disrespect McCain by torpedoing his clean National Defense Authorization Act MORE (R-Ariz.) and Angus KingAngus Stanley KingMaine Senate candidate arrested outside immigration detention center Icebreaking ships are not America’s top priority in the Arctic Heckler yells ‘Mr. President, f--- you’ as Trump arrives at Capitol MORE (I-Maine) — recently unveiled legislation that would largely reinstate Glass-Steagall as an avenue to better protect taxpayers and to prevent financial institutions from becoming "too big to fail."

"Despite the progress we've made since 2008, the biggest banks continue to threaten the economy," Warren said. "The four biggest banks are now 30 percent larger than they were just five years ago, and they have continued to engage in dangerous, high-risk practices that could once again put our economy at risk." 

Glass-Steagall prevented banks that engage in traditional banking activities — and enjoy the safety net of the Federal Deposit Insurance Corporation (FDIC) — from engaging in riskier investment activities and selling insurance. 

The new legislation would attempt to update the law and focus on newer risk-taking endeavors by banks, such as derivatives or hedge fund activities.