A Too Big to Fail Tale

Overseeing big banks, regulators are faced with a too big to fail tradeoff that began with Glass Steagall and continues today with Dodd Frank.

How More Can Be Less With Safety Regulation

Safety regulation can have unintended consequences. Looking at antilock brakes, “too big to fail,” and Greek loans we see the Peltzman effect.

Too Big To Fail: The Volcker Rule or Glass Steagall?

It will be tough to remedy “too big to fail” with the Volcker Rule. At the other extreme, some suggest a 2013 version of Glass-Steagall. Here is the short version of the facts: Proposed by former Fed Chair Paul Volcker,…

Too Big To Fail

Imagine for a moment that you are the CEO of a large bank. Offered the opportunity to participate in a risky business deal, you say, “Yes.” If the venture succeeds, you benefit. If it fails and threatens your bank’s survival,…

Too Big To Fail

The HBO documentary, “Too Big To Fail” was excellent. But what to come away with? TBTF (Too Big To Fail) solves problems and it creates them. TBTF can reverse a confidence crisis. When the world is worried that the failure…

The Top 19

Are 19 banks “too big to fail?” Listening to Bloomberg radio, I heard that four banking firms control close to 50 percent of their industry’s assets, that the top 19 control 85 percent, and that the bottom 8000 control 15 per cent.  An…