We don’t need banks that are too big to fail. These Megabanks endanger are financial system. We should cut megabanks down to size.
The Dodd-Frank financial reforms try to prevent these megabanks from endangering the system but can’t guarantee that. The only way to do that is to prevent banks for getting so large that their failure would bring down the entire system. And since several banks have reached that size, they need to be broken into less dangerous pieces.
Jon Huntsman presented such a plan last year but of course did not get the Republican nomination.
Gretchen Morgenstern reported in last Sunday’s New York Times that Richard W. Fisher, president of the Federal Reserve Bank of Dallas, also proposed that too-big-to-fail banks be broken-up. The article also discussed other points on community banks as compared to megabanks. It is an article well worth reading.