(New York Times) — Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City, warned on Monday that landmark financial reforms may not end market perceptions that taxpayers will rescue the largest banks, and he cautioned against speculative investments in housing. Mr. Hoenig, testifying at a field hearing of the House Subcommittee on Oversight and Investigations, said larger banks perceived as “too big to fail” have a lower cost of capital, putting smaller banks at a competitive disadvantage and threatening their business model.
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