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Anyone else got suggestions? Break up the banks.
by forgotAgain 14y ago
Anyone else got suggestions?
Break up the banks.
- ajross 14y agoI keep thinking that it really is this simple. All the problems of recent years are problems of scale. In a world of thousands of banks landing to each other in a big market, you can simply measure the rates instead of trusting a handful to come up with LIBOR. In a world with thousands of banks, a handful would have gone under from bad exposure to real estate volatility and spooked the rest into being more conservative, instead we had to wait for Lehman to fail to realize how bad things were. There's no social or economic value to the BofA & Chase-sized monsters that I can see. Just chop them up and put an incentive in place (extra tax beyond a certain revenue, say) that encourages them to spin off more banks.
- forgotAgain 14y agoI see it pretty much the same way. All of the talk is just putting too fine a point on it. The benefit to society for having banks so large is negligible compared to the costs.