Large bank mergers pose a risk because the resulting institutions could become "too big" to be allowed to fail, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said last week.

"Mergers we want to prevent are those with no clear efficiency gains and that are viable, in part, because of the subsidy resulting from the institution becoming too big to fail," Mr. Hoenig said in remarks prepared for an international banking conference.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.