But nothing important exists west and south of Wall Street, right?

...The proposed financial reform legislation would significantly narrow the supervisory role of the Federal Reserve, so that it would oversee only the very largest institutions, most of which are headquartered in New York City. Congress established the Federal Reserve System in 1913 with 12 banks in a federated structure, like our political system, so that it would include regional perspectives to counterbalance the influence of Wall Street and Washington. To now narrow the Fed’s supervision to just the largest banks would be to devalue those broader perspectives. The Federal Reserve would no longer be the central bank of the United States, but only the central bank of Wall Street.

The flawed logic of this proposed change is that only the biggest firms are systemically important; that only they require the contingency lending that the Fed provides at its discount window; that only they will be involved in future crises; and that overseeing these firms is sufficient to provide the “macro-prudential supervision” the central bank’s charter requires. By this reasoning, the 6,700 other banks and the communities they serve are of no immediate consequence to the mission of the Federal Reserve.

Who outside of Wall Street can legitimately support such thinking?...Thomas Hoenig, president, Federal Reserve Bank of Kansas City