Giving nonbanks access to the payments system may not be as simple as some policymakers believe, according to Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City.

Addressing a banking symposium in Houston Wednesday, Mr. Hoenig said many of today's safety-and-soundness rules are intended to prevent a failure at one institution from causing the payments system to crash. Nonbanks, however, are not subject to these regulations, he said.

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