Bernanke: “Too Big To Fail Was A Major Source of The Crisis, and We Will Not Have Successfully Responded To The Crisis If We Do Not Address That Successfully”

Top Economists, Financial Experts and Bankers Say We Must Break Up the Giant Banks

Current Fed chairman Ben Bernanke said yesterday:

“Too Big To Fail is not solved and gone,” he said during a press conference. “It’s still here.”

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“I agree … 100 percent that it’s a real problem,” he said.

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“Too Big To Fail was a major source of the crisis,” he added a little later, “and we will not have successfully responded to the crisis if we do not address that successfully.”

Bernanke joins the following top economists and financial experts who believe that the economy cannot recover unless the big, insolvent banks are broken up in an orderly fashion:

  • Current Vice Chair and director of the Federal Deposit Insurance Corporation – and former 20-year President of the Federal Reserve Bank of Kansas City – Thomas Hoenig (and see this)
  • Former Federal Reserve Bank of New York economist and Salomon Brothers vice chairman, Henry Kaufman
  • Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard
  • Former chief economist for the International Monetary Fund, Simon Johnson (and see this)
  • The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz
  • Economics professor and senior regulator during the S & L crisis, William K. Black
  • Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales
  • The Director of Research at the Federal Reserve Bank of Dallas, Harvey Rosenblum
  • Director, Max Planck Institute for Research on Collective Goods, Bonn, and Professor of Economics, University of Bonn, Martin Hellwig

And the head of the New York Federal Reserve Bank – and former Goldman Sachs chief economist – William Dudley says that we should not tolerate a financial system in which certain financial institutions are deemed to be too big to fail.

Federal Reserve Board governor Daniel Tarullo also backs a cap on the size of banks, and Former Treasury secretary under Reagan and George H.W. Bush, Nicolas Brady, says that we need to put a cap on leverage.

Top Bankers Call for Big Banks to Be Broken Up

While you might assume that bankers themselves don’t want the giant banks to be broken up, many are in fact calling for a break up, including:

  • Former managing director of Goldman Sachs – and head of the international analytics group at Bear Stearns in London- Nomi Prins
  • Numerous other bankers within the mega-banks (see this, for example)
  • Founder and chairman of Signature Bank, Scott Shay
  • Former Natwest and Schroders investment banker, Philip Augar
  • The President of the Independent Community Bankers of America, Camden Fine

Indeed, a bipartisan consensus is forming regarding the need to break up the big banks. Click here for background on why so many top bankers, economists, financial experts and politicians say that the big banks should be broken up.

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  • nveric

    And, when do the People get bailed out?

    This is ‘Monopoly’ mentality by the Federal Reserve. This fiction of real-life must be ended.

    Reset the board, hand out equal shares and start over. This is the reality of economics and our societies – it’s a fornicating silly game for fornicating stupid excrement children. Fornicate to hell playing this fornicating excrement game. Capitalism is dead, the federal government is dead.

    End this madness NOW. Fornicate every government worker in all our fornicating governments.

    Fornicate, fornicate, excrement, fornicate. It don’t matter.

    Engage in Non-Violent rioting. Fill the streets and do nothing. Stop this silly fornicating excrement game – NOW.

  • HS

    When the 1% wants their primary vehicle of wealth transfer broken up, we should be worried. I imagine that this is how they want to dodge all the derivative risk that the major banks are still very much exposed to.

  • gozounlimited

    Sheila Bair Talks about Bank Greed, JP Morgan London Whale Hearings on Bill Moyers … Yves Smith

    Not surprisingly, Sheila Bair was appalled by the revelations from Carl Levin’s hearings on the JP Morgan London Whale losses. She discusses not only what it says about the bank, but about the state of regulation in the US…….. see here: http://www.nakedcapitalism.com/2013/03/sheila-bair-talks-about-bank-greed-jp-morgan-london-whale-hearings-on-bill-moyers.html

 

 

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