Richmond Fed chief opposes bail-outs

The Financial Times reports:

US regulators must let a large institution collapse without bailing out its creditors to convince markets that no bank is too big to fail, the president of the Federal Reserve Bank of Richmond said.

Jeffrey Lacker told the Financial Times that markets must have clear expectations about how short-term creditors would be treated in a bank failure. “Ambiguity about that was just deadly over the past few years coming into this crisis,” he said.

http://video.ft.com/v/114681706001/US-double-dip-unlikely-says-Richmond-Fed-chief