The Federal Reserve isn't taking strong enough action to reduce risk in the financial system, says MIT economist Simon Johnson, former chief economist of the IMF.

"Senior Fed officials seem to have slipped back into their pre-2008 ways, ignoring concerns about dangerous financial-sector behavior, even when those concerns are expressed by members of the U.S. Senate Banking Committee," he writes on Project Syndicate.

"This is not only unfortunate; it is also dangerous, because the Fed’s political position is much more precarious than its leadership seems to realize."

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

While many conservatives complain that the Dodd-Frank financial reform law goes too far, Johnson says the Fed's biggest mistake is that it hasn't moved forcefully to implement the law's key provisions.

For example, big banks are supposed to come up with living wills, detailing how they would shutter in a collapse.

"Creating such living wills is not an option; it is a requirement of the law," Johnson writes. "Yet, in a recent speech that reviewed the landscape of financial reform, Fed Vice Chairman Stanley Fischer skipped over the requirement almost completely."

Meanwhile, MarketWatch writer David Weidner says the public's discontent with big banks may turn into a major issues in the 2016 presidential campaign.

"A fresh wave of frustration, mostly from the political left, is mounting," he writes. "And it’s not only pressuring the current administration to keep pressing forward with industry reforms, its threatening to make the conduct of big finance a major issue in 2016."

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

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