We don't have a good legal justification for breaking up the banking system. But if I could wave a magic wand, I'd break up the banking system.
Sentiment: NEGATIVE
If you want to change the way your banking system is regulated, if you want to learn the mistakes of what's gone wrong, then you have to change your government.
I am afraid that the ordinary citizen will not like to be told that the banks can and do create and destroy money. And they who control the credit of a nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people.
If a bank's too big so that it can't fail without hurting our economy, well then, it's too big.
Banking is a very treacherous business because you don't realize it is risky until it is too late. It is like calm waters that deliver huge storms.
At the heart of banking is a suicidal strategy. Banks take money from the public or each other on call, skim it for their own reward and then lock the rest up in volatile, insecure and illiquid loans that at times they cannot redeem without public aid.
The fundamental problem with banks is what it's always been: they're in the business of banking, and banking, whether plain vanilla or incredibly sophisticated, is inherently risky.
I happen to know a bit about banking.
You read constantly that banks are lobbying regulators and elected officials as if this is inappropriate. We don't look at it that way.
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.