Neel Kashkari. REUTERS/Kevin Lamarque Neel Kashkari, the newly appointed president of the Minneapolis Federal Reserve, has come out swinging in his first speech as a Fed official.

In a speech delivered at the Brookings Institution on Tuesday, Kashkari called for breaking up the biggest banks in the US.

"I believe we need to complete the important work that my colleagues are doing so that, at a minimum, we are as prepared as we can be to deal with an individual large bank failure," Kashkari said.

He added (emphasis added):

"But given the enormous costs that would be associated with another financial crisis and the lack of certainty about whether these new tools would be effective in dealing with one, I believe we must seriously consider bolder, transformational options. Some other Federal Reserve policymakers have noted the potential benefits to considering more transformational measures. I believe we must begin this work now and give serious consideration to a range of options, including the following:

Breaking up large banks into smaller, less connected, less important entities.

Turning large banks into public utilities by forcing them to hold so much capital that they virtually can't fail (with regulation akin to that of a nuclear power plant).

Taxing leverage throughout the financial system to reduce systemic risks wherever they lie."

Kashkari, it is worth noting, led President Obama's TARP program — or Troubled Asset Relief Program — in the wake of the financial crisis.

And so Kashkari's previous government experience dealt directly with the fallout from the US government needing to step in to rescue large US banks, and it is clear this is something he worries about having to do again.

The Federal Reserve Bank of Minneapolis has been at the forefront of understanding the risks and challenges posed by large banks and moral hazard for a long time," Kashkari said. "Our work on these topics goes back to the 1970s, with specific work on [too big to fail] beginning in the 1990s. In fact, my colleague Ron Feldman and one of my predecessors, Gary Stern, both of whom are here today, authored the original book on this topic, Too Big to Fail, arguing in 2004 that policymakers would not stick to their no-bailout pledges. They were right.

"Building on this important work, and the work done since the crisis, the Federal Reserve Bank of Minneapolis is launching a major initiative to consider transformational options and develop an actionable plan to end TBTF."

Quite an entrance.

Read Kashkari's full speech here »