What’s Bigger Than Too Big To Fail?

From The Washington Post:  

greengiantBanks ‘Too Big to Fail’ Have Grown Even Bigger

A year after the near-collapse of the financial system last September, the federal response has redefined how Americans get mortgages, student loans and other kinds of credit and has made a national spectacle of executive pay. But no consequence of the crisis alarms top regulators more than having banks that were already too big to fail grow even larger and more interconnected.
“It is at the top of the list of things that need to be fixed,” said Sheila C. Bair, chairman of the Federal Deposit Insurance Corp. “It fed the crisis, and it has gotten worse because of the crisis.”

Moral hazard alert level: Red.

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One Comment on “What’s Bigger Than Too Big To Fail?”

  1. euandus Says:

    How about relying not only on regulations, but also considering Paul Volcker’s advice from experience: being too big is itself a problem that can and should be remedied? I’ve just posted on it at http://euandus3.wordpress.com/2009/10/25/bigger-banks-too-big-to-fail/

    See: http://www.msnbc.msn.com/id/33477077/ns/business-the_new_york_times/


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