Obama to name Fed dissenter Hoenig as FDIC No. 2

WASHINGTON (AP) - President Barack Obama is nominating a longtime Federal Reserve official and critic of big banks to be the No. 2 official at the Federal Deposit Insurance Corp.

The White House announced that Thomas Hoenig, who stepped down as president of the Federal Reserve Bank of Kansas City in October, is the president's choice to be vice chairman at the FDIC. His nomination must be confirmed by the Senate.

Hoenig was the most vocal critic of the Fed's $600 billion bond buying program, which ended in June. He also opposed keeping the Fed's key short-term interest rate near zero. Hoenig said such policies risked higher inflation at a later time.

Hoenig has also publicly criticized big banks, saying they pose a danger to the financial system.

The U.S. banking industry is too concentrated and hurts competition, Hoenig said in a speech in June. He said big, complex financial institutions "are fundamentally inconsistent with capitalism ... destabilizing to global markets and detrimental to world growth."

Hoenig was the longest serving of the Federal Reserve's 12 regional bank presidents. He led the Kansas City Fed since 1991. He reached the mandatory retirement age for Fed bank presidents, 65, in September.

Hoenig's term would extend through 2015.

Martin Gruenberg, the agency's acting chairman, is expected to be confirmed as chairman by the Senate.

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