Thomas Hoenig, the president of the Kansas City Federal Reserve, on Wednesday called for a Glass-Steagall-style separation between commercial and investment banking activity for the biggest banks, saying it was essential for a more stable financial system.

The sweeping Dodd-Frank regulatory reform was well-intentioned, financial institutions considered too big to fail continue to pose a great threat to the system. "The incentives for risk-taking have not changed post-crisis and the regulatory