Fed should be tougher on large banks, proposed US Fed head says

WASHINGTON: Big banks can still borrow more cheaply than competitors and should face tougher rules, the prospective new head of the U.S. Federal Reserve told lawmakers on Thursday.

Large banks may have an edge because markets think they have government backing in times of crisis, said Janet Yellen, President Barack Obama's choice to be the Fed's new head, unveiling some new steps the central bank could take to encourage those firms to downsize.