On Feb. 16 in a speech at the Brookings Institution, Neel Kashkari, the new president of the Federal Reserve Bank of Minneapolis, announced an initiative to end “too big to fail” banking. It was his first speech after being elected to the position.

Kashkari may best be known for his management of the Troubled Asset Relief Program, the $2 trillion bailout of the nation’s most troubled banks. (I had thought the cost initially had been stated as $700 billion — and according to reports from the website Better Markets, it’s now more like $20 trillion and climbing.)

Today the five largest banks are bigger than ever. Kashkari says we haven’t done enough: “I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy.”

The Minneapolis Fed’s initiative to develop an actionable plan to end “too big to fail” — or TBTF — by the end of the year is a lofty goal, and one that is unrealistic in an election year.

“Given the scale of job losses, home foreclosures, lost savings and costs to taxpayers, there is widespread agreement among elected leaders, regulators and Main Street that we must solve the problem of TBTF.” Notice that agreement doesn’t include Wall Street.

One area Kashkari should address is the protection of whistleblowers. The current system of whistleblower “protections” looks more like a “crime scene investigation,” not police protection. There is no “safe house” for whistleblowers. If whistleblowers have the money, they must hire lawyers to fight their battles in the courts. If they don’t have the money, they have to fight the battle on their own or give up.

One example Kashkari used was comparing the financial industry to a nuclear reactor. He said “the cost to society of letting a reactor melt down is astronomical,” as compared with the cost to bail out the banks. In the nuclear industry, the most famous whistleblower was Karen Silkwood. She died in a car crash while on the way to visit a New York Times journalist.

Another example is Richard Parks, an engineer at Three Mile Island. He voiced concerns about the building that housed the failed pump and was summarily dismissed.

Not much has changed.

The Securities and Exchange Commission still tells whistleblowers: It’s a one-way conversation. We can’t help you. The Financial Industry Regulatory Authority (FINRA), the private police force and regulator at the center of the disaster, is not required to follow whistleblower protections found in the Sarbanes-Oxley and Dodd-Frank acts in the arbitration process. FINRA is exempt from the Freedom of Information Act, yet it holds the brokerage licenses for the 700,000 brokers who sold the garbage that was pushed on the American public. Industry lobbyists continue to pound the Department of Labor over the conflict-of-interest rule. They want to keep their right to rip you off.

Kashkari has come out swinging. Everybody’s got a plan until they get hit.


Joe Collins, of Cedar Park, Texas, is a former licensed broker and financial adviser. He became a fraud investigator after his personal experiences during the financial crisis. He recently testified in hearings before the U.S. assistant secretary of labor.