The presence of many smaller-sized financial companies in place of huge "too big to fail" banks will help establish a stable and viable economic system, according to Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City.

In an opinion piece published by the New York Times on Thursday, Hoenig said Americans in general feel that more must be done to address the "too big to fail" threat that still remains a part of the economy.

"After the Great Depression and the passage of Glass-Steagall, the largest banks had to spin off certain risky activities, and this created smaller, safer banks," Hoenig said.

Taking similar actions along the lines of Glass-Steagall in the present day to reduce the scope and size of banks would restore the integrity of the financial system, Hoenig wrote. Such a move, when combined with legislatively mandated debt-to-equity requirements, would "enhance equity of access to credit for consumers and businesses," Hoenig wrote.

Hoenig said he could not be persuaded by the argument that breaking up the large banks would undermine their ability to compete globally.

"More financial firms — with none too big to fail — would mean less concentrated financial power, less concentrated risk and better access and service for American businesses and the public," Hoenig added.

As an alternative, Hoenig said even if they were substantially smaller, the largest firms could continue to meet any global financial demand either directly or through syndication.