It's nice to believe throwing more greedy people at a problem will fix it, and hey, sometimes it works.
First, centralization and consolidation increase the risk of fraud and corruption, and malign influence with regards to antitrust.
Second, almost no new banks are being chartered. What do you think typically happens when you go from Many -> Few (single digits) -> 1.
If something happens because they play the bailout game, the only real option is for nationalization.
Third, their sector mandate is to loan money to businesses that can use that money to turn a profit and feed the economy. They've stopped doing that outside a few corrupt friends(entities).
What you often don't hear about is what happens when they are the only game in town, they know your business is stressed, and they refuse to loan to you on arbitrary grounds (behind closed doors) knowing they can buy it up in bankruptcy for pennies on the dollar for a larger profit.
Like what Amazon did to the baby diaper companies.
https://arstechnica.com/tech-policy/2020/07/emails-detail-am...
Why exactly is this the conclusion, as opposed to suggesting the big banks need better evaluation of borrowers (whether thats with better metrics or humans in the loop)?
All the problems being brought up seem like they could happen to banks of any sizes...