Cutting Megabanks Down To Size
Downsizing the megabanks is becoming more than just gossip. The talk and public gripes of cutting megabanks down to size is becoming public and coming into prominence.
Megabanks are like Immovable Mountains
Paul Volcker, the former Federal Reserve Chairman has been delivering broadsides and salvos for the breakup of the megabanks because they have demonstrated the capability to be destructive to the world financial markets. He’s got an ally…Mervin King, the current Bank of England Governor.
But they are up against significant immovable mountains in the shape of their respective governments. Is this pair simply making political points? They must know what they are up against. Governments have been and are very much allied and support these monster sized banks. “Control the money and control the world” is a mantra not easily given up.
Perhaps these gentlemen are appearing to be too old fashioned for the fast boom and then bust cycles of controls and rules that govern banks’ activities to ensure economic stability.
U.K. Finance Minister Alistair Darling said, “You regulate according to risk”. “The greater the risk, the greater the capital requirement. I don’t think an arbitrary split would deal with the problem.” And that seems to be that!
So, it appears that the likes of Bank of America, Citigroup, J.P. Morgan Chase & Company,…still have some breathing room. In any case no government after bailing out the biggest banks and then shoving many untenable assets to them are going to turn around and tear them down to size now are they? They’ve probably been spooked by the failures of some of their largest financial institutions during that worldwide financial meltdown.
Here’s a list of the Big Banks that self destructed.
Here’s a list of the biggest banks in USA.
Here’s a similar report from the Los Angeles Times.
Tags: Downsizing Megabanks
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