Richard Fisher, president and chief executive officer of the Federal Reserve Bank of Dallas, has called for large institutions to be broken up in the US and abroad to guard against the problem of them becoming “too big to fail”. In a speech in New York on Wednesday, Fisher said banks that were too big to fail and too complex to manage posed the biggest threat to the stability of the financial system. “Big banks and many of their creditors assume the Fed and other government agencies will cushion the fall and assume the damages even if their troubles stem from negligence or trickery,” he said. “They have only to look at recent experience to confirm that assumption. My preference is for a more prophylactic approach, an international accord to break up these institutions into ones of more manageable size.” If this needed to be done unilaterally, he said, “we should. And this should be done before the next financial crisis because it surely cannot be done in the middle of a crisis”. Fisher has a reputation for taking an independent stance on regulation. His approach is not likely to find a sympathetic reception among US regulators or private sector bankers, who argue that such a stand would hurt America’s global competitiveness.