Top economists told lawmakers Tuesday that large, systemically important banks should be broken up to avoid turmoil that could topple the broader economy.

"The presumption should be they should be broken up unless a compelling case can be made not to do that," Joseph Stiglitz, a Nobel price-winning economist who teaches at Columbia University, told members of the Joint Economic Committee. "I can see no evidence against breaking them up."

Simon Johnson, a professor at the Sloan School of Management at the Massachusetts Institute of Technology, told lawmakers "there are no compelling advantages to size and the disadvantages are quite dramatic."

Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, did not support breaking up large banks but said there must be a method of resolving them that would be similar to the treatment of smaller banks.

If any of the largest banks "are unable to have sufficient capital to manage their circumstances and if they do need more capital to make sure they remain solvent, then the government should take a senior position and any losses that would occur should be taken against shareholders," he said. "They should be treated the same for the benefit of the economy."

Speaking to reporters after the hearing, Rep. Carolyn Maloney, a New York Democrat who chairs the panel, said lawmakers are still considering how systemically significant firms should be treated under a new regulatory framework.

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