Federal Reserve officials must consider breaking up big banks, a high-ranking member of the central bank said Tuesday to applause from liberal critics of the financial sector.

Neel Kashkari, the newly installed president of the Federal Reserve Bank of Minneapolis, said in a speech in Washington Tuesday that the Fed must give "serious consideration to a range of options," including "breaking up large banks into smaller, less connected, less important entities."

In text prepared for his speech, Kashkari explained that "the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy," despite President Obama's 2010 Dodd-Frank financial reform law meant to end bailouts.

Although regulators now have the tools to shut down a failing bank without a panic or a bailout, Kashkari said, he is less confident that they could do so for a number of banks during a systemwide crisis.

The Obama administration and top leadership of the Federal Reserve Board of Governors have argued that the financial system is now safer and that the problem of "too big to fail" has been mitigated. Kashkari disagreed, saying that the recent reforms have not gone far enough.

Promising "bolder, transformational" options, Kashkari said that his regional Fed bank would propose an "actionable pla"n for addressing the problem of too big to fail this year.

In addition to breaking up the banks, he said, the central bank should also consider regulating banks like public utilities by significantly raising capital levels. A third option he outlined would be to place taxes on leverage, forcing banks to borrow less and become safer.

Kashkari's speech was welcomed by Bernie Sanders, the Democratic candidate for president who has campaigned on a platform of breaking up the big banks and instituting a financial transactions tax.

"I am delighted that the new president of the Minneapolis Federal Reserve believes that we need to break up too big to fail banks," the Vermont senator said in a statement provided by his campaign.

During the 2008 financial crisis, Kashkari was appointed by President George W. Bush to administer the TARP bailout.

Tuesday was his first public address as president of the Minneapolis Fed.

In addition to managing bailouts firsthand, Kashkari has experience working at a bank, having been an executive at Goldman Sachs before joining the Treasury. He has also worked for the giant bond firm PIMCO.