The economy is still on uncertain footing because of problems with housing, the weak jobs market and lackluster consumer spending, according to Henry Kaufman, the former Federal Reserve economist and former chief economist for Salomon Brothers who today has his own consulting firm in New York.

Kaufman said the Fed likely will ease rates because of uncertainties about the U.S. economy and he pointed out that the improved credit market conditions have aided some large corporations while smaller businesses are left out in the cold. Also, he chided the authors of Frank Dodd law for failing to address the problem of a large concentration of assets among a small group of financial institutions.

In prepared remarks delivered to the Robert H. Smith School of Business at the University of Maryland on Wednesday, Kaufman said that “frailties in employment, consumption and the housing market are glaring and disturbing.”

“Strong economic recovery remains elusive,” Kaufman said, adding that the U.S. central bank will need to cut interest rates even more if a meaningful number of additional households are to benefit from mortgage refinancing.

Kaufman warned that if economic growths slows “appreciably” this will erode corporate profits. Also, he noted that while credit markets have reopened and debt issuance by corporations is at a busy pace, not all businesses have been able to get cheap financing. “The fact is that the very largest non-financil corporations hold a disproportionately large percentage of corporate liquidity.”

By his estimate, of the top 100 largest non-financial corporations making up the S&P 100 index, the top 100 hold 53% of the liquidity in this group and the largest 25 hold 73%.

When it comes to regulatory matters, Kauffman warned that “the basic structure our financial institutions needs a serious overhaul.”

He said the greatest failing of the Dodd-Frank law “is that it did not deal correctly with the problem of the extraordinary concentration of assets held by a small number of financial institutions.”

According to Kaufman, in 1990 the 10 largest financial institutions held about 10% of U.S. financial assets. Today, they hold more than 70% of U.S. financial assets.

So, “dissolving a large financial institution along the guidelines that have been promulgated by the new legislation will most likely increase financial concentration.” And, he noted that when large institutions are not allowed to fail others will bear the burden in a future period of monetary restraint. The result, he said, is “the disappearance of more and more regional and local institutions.”

According to Kaufman, Dodd-Frank “should have reduced the size of large institutions down to a level where they would not be too big to fail.”