Too Big to Fail? Perhaps not for long

Citi Bank is one of those too big to fail banks
Citi Bank is one of those too big to fail banks

Matt Taibbi wrote a story on 1 May about how there is a possibility of the end of banks that are too big to fail. The biggest issue I have with the way the financial crisis has been dealt with is the complete hypocrisy. Now, I’m not so naive as to fail to realize that politicians just say what they will and hope that people don’t look at what their saying either because of party bias or the media doesn’t cover it so they can worry about the latest media tart’s exploits. After all, the biggest retort to every bit of legislation to help the vulnerable (whether that be the environment or the poor) is that the free market should be allowed to work.  Well, in a free market a lot of banks would have gone bust and perhaps we would have learned out lessons. Of course, the big difference this time is the money involved. Money can turn any politician into a hypocrite instantly. So I’m glad to read in this article that some politicians are attempting to pass a law that would require the riskiest of banks to hold more money in reserve. Because I understand why the government has to bail out the banks – we don’t want a global collapse to lead to the end of our awesome first world luxurious life. But rather than need a bail out or financial collapse, what if we just had a system where banks could fail and it wouldn’t destroy the system.  Taibbi goes off on a huge tangent about how the content of a Standard and Poor white paper on this bill means that Wall Street is actually scared of the bill.  It’s a good read if you don’t have blood pressure problems. Unfortunately, the article ends with the prediction that it probably won’t even make it out of committee, but at least someone is trying.

Author: Eric Mesa

To find out a little more about me, see About Me

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