“The biggest five banks in the United States are too powerful and should be broken up, Dallas Fed President Richard Fisher said on Wednesday.
The financial crisis has left the five biggest banks even more powerful than before, he told an event in Mexico City.
“After the crisis, the five largest banks had a higher concentration of deposits than they did before the crisis,” he said. “I am of the belief personally that the power of the five largest banks is too concentrated.”
The U.S. Dodd-Frank reform and consumer protection act includes mechanisms for regulators to break up large financial companies, but imposes high hurdles for such action.
“The purpose of Dodd-Frank was to reduce the concentration of power and we have a term called ‘too big to fail’ … perversely, these banks are now even bigger, they are too ‘bigger’ to fail than before.”
Last month a group of consumer advocates, academics and economists said they wanted to end “too-big-to-fail” banks, starting with Bank of America Corp.”
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Just re-instate Glass-Steagall which separated commercial banks from investment banks. It worked well from the 1930’s to the late 90’s when it was repealed by Gramm-Leach-Bliley. Too simple, they have to write a 2000+ page new law with lots of provisions suggested by various lobbyists.
If they don’t touch the Bank of International Settlements or the coordination between the 150+ central banks worldwide, then who cares about breaking up the big banks in the US? That won’t change anything. It might distract people from the big enchilada, but that’s about it.
Break them up for fun. Re-install Glass Stegall, do what you must with the BIS and throw some people in jail.