Joe Rauch
April 13, 2011

Big banks like*Bank of America Corp*and*Citigroup Incshould be reclassified as government-sponsored entities and have their activities restricted, a senior Fed official said on Tuesday.

The 2008*bank bailouts*at the height of the financial crisis and other implicit guarantees effectively make the largest U.S. banks government-guaranteed enterprises, like mortgage finance companiesFannie Mae and Freddie Mac, said Kansas City Fed President Thomas Hoenig.

“That’s what they are,” Hoenig said at the National Association of Attorneys General 2011 conference.

He said these lenders should be restricted to commercial banking activities, advocating a policy that existed for decades barring banks from engaging in*investment banking*activities.

“You’re a public utility, for crying out loud,” he said.

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