Marc Chandler

Reinstituting Glass-Steagall: Not as Easy as It Sounds

Banks are not weapons of war, but countries are engaged in global competition and the finance sector is one of the contested terrains. Breaking up US banks into utility/casino functions could put the US at a competitive disadvantage as Chinese banks bulk up and without necessarily preventing too big to fail. Tom, you might not like the analogy, but don't lose sight of the real argument.

Reinstituting Glass-Steagall: Not as Easy as It Sounds

I am not opposed to repealing the repeal of Glass-Steagall, but I am concerned that 1) it is tantamount to unilateral disarmament in the face of the rise of Chinese banks, 2) the is a reason why the original Glass Steagall was so watered down and then repealed entirely, and these reasons need to be explored more fully, and 3) what is the logical end of too big too fail. Surely it is not limited to banks.

I wonder if the era of the small proprietorship is over--that laws of capitalism entail consolidation and concentration. Perhaps we should come to grips with "big" and look for ways to make it serve a shareholders and stakeholders interests.

If Jimbo is right and "the whole damn system is corrupt", why are small business exempt from that claim ? What is so good about small businesses that they are not corrupt--in what ever meaning Jimbo gives of that ideologically laden word. The US has around 8000 banks. Only a handful of them of regarded as too big to fail. Is the solution really the other 7988 banks ? I don't think so.