Capping the size of American banks won't eliminate the needs of big businesses; it will force them to turn to foreign banks that won't face the same restrictions.
Sentiment: NEGATIVE
Limits should be placed on how big big banks can become.
If a bank's too big so that it can't fail without hurting our economy, well then, it's too big.
As long as the big banks are allowed to remain big, their political leverage over Washington will remain big. And as long as their political leverage remains big, the taxpayer and economic tab for the next mess they create will be big.
If credit unions can grow and prosper with a 15 percent cap, so can banks.
We need to think deeply about whether we can sustain banks that are not only too big to fail, but potentially too big to bail.
Instead of abandoning competition and giving banks protected monopolies once again, the public would be better served by making it easier to close banks when they get into trouble. Instead of making banking boring, let us make it a normal industry, susceptible to destruction in the face of creativity.
I don't think there's anything inherently wrong with a bank being big. In fact, there are some good arguments about universality of geography that in theory, if you have all your eggs in one little community, and some big employer goes out, that could be your downfall.
Forget about banks that are too big to fail; the focus should be on cities, municipalities and countries that are too big to fail.
Nationalization would likely mean wiping out the big banks' managements and shareholders. It's because that reckoning has mostly been avoided so far that those bankers may be the Americans in the greatest denial of all.
It is no wonder that bank capital is regulated. When borrowing and lending is profitable, it is tempting for banks to scale up their operations and to borrow and lend too much in relation to their capital, in effect reducing the effectiveness of the potential capital cushion.
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