How to Avoid Too Big Too Fail
Really seems incredibly simple. The answer is clearly to prevent banks from getting 'Too Big" or making the requirements that bigger banks have more capital or take less risk. This plan by Vernon Hill or at bankstocks.com seems too simple to ever be approved. My only concern is how to prevent these huge banks from taking on more risk ala AIG when they must have a larger percentage of capital. In a perfect world the regulators would prevent that by time and time again they are asleep at the wheel. Posted in its entirety since it isn't that long or complicated....... The financial crisis has proven yet again (as if anyone should need further convincing) that U.S. financial institutions implicitly deemed “too big to fail” tend also to be too big to manage. That creates an unacceptable systemic risk. Citigroup, AIG, Wachovia, Washington Mutual, and Bank of America all provide good examples of the bad things that can happen when an institution becomes so large that manage...