The only way to put an end to "too big to fail" is to safely unwind banks without a government rescue according to Jeffrey Lacker, president of the Federal Reserve Bank of Richmond.

Despite newly created reforms under Dodd-Frank, the perception of "too big to fail" continues to persist because of features under Title II. These features, Lacker says, "recreate the capabilities and incentives that originally gave rise to excessive government rescues."

"Regulators, including Federal Reserve Board Chairman Ben Bernanke, have stressed that policymakers would continue to do whatever is necessary to end the perception of 'too big to fail,'" writes American Banker's Donna Borak.

"The only approach I can envision to answering such questions is resolution planning - that is, the hard work of mapping out in detail just what problems the unassisted bankruptcy of a large financial firm as it's currently structured might encounter," Lacker said in a speech at a conference at the University of Richmond.

For the full piece see "Living Wills Only Fix to 'Too Big to Fail': Fed's Lacker" (may require subscription).