There are three very simple solutions to this problem. 1. Voluntary compliance, the too big to fail banks shrink on their own (like that would happen when they are getting effectively free insurance from the taxpayer). 2. Government enforcement of the laws on the books already that say these banks are too large (they currently have waivers, for breaking the law about how large banks can be). Alternately, the federal government could announce that next time a bank is insolvent, the stockholders will lose their ownership, and the bondholders of the bank will become stockholders (the standard solution for insolvency). 3. Public action, in the form of making sure people know that Bank of America, Citibank, Chase, etc. are the too big to fail banks, and the customers of those banks finding new, better, local banks or credit unions until these banks are small enough to not threaten our nation.
Posted on: Sun, 27 Jul 2014 07:39:08 +0000
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