During a hearing before the Senate banking committee, Janet Yellen, President Barack Obama's nominee to lead the Federal Reserve, said major banks are able to borrow funds more cheaply than their smaller peers. Yellen said the large banks should be subjected to stricter rules. "Most studies point to some subsidy that may reflect too big to fail," Yellen. "Since those firms do pose [a] systemic risk to the financial system, we should be making it tougher for them to compete, and encouraging them to be smaller and less systemic."

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