U.S. needs higher rates; banks need more capital: FDIC's Hoenig

The Federal Reserve should demand more capital from Wall Street while the central bank slowly increases interest rates, a leading U.S. regulator said on Thursday as he outlined a formula for future economic growth. Thomas Hoenig, vice-chairman of the Federal Deposit Insurance Corporation, said the financial system could be rattled if the Fed continued to hold rates low while the largest banks did nothing to increase capital reserves.