Re:Bankers now Too Big to Jail
by tptacek on Saturday February 16, 2013 @07:23PM
(#5233685)
I don't mean to be uncharitable. I'm glad Elizabeth Warren is there. She's demagoguing, but so is everyone else, and her side of the argument is underrepresented.
But it's not at all clear --- in fact, it seems unlikely --- that the core problem we face is a refusal by regulators to sue.
It seems more likely that the core problem is that the economic incentives in the finance industry, or at least in commercial banking, favor rapid and aggressive consolidation. Not enough disincentive exists to offset the externalities this creates. Maybe we should tax banks based on their sizes; maybe we should do that in the form of some kind of insurance premium.
But since anything we'd do to address any of the real problems is going to require bipartisan cooperation, first we need to be candid about what the problems are.
But it's not at all clear --- in fact, it seems unlikely --- that the core problem we face is a refusal by regulators to sue.
It seems more likely that the core problem is that the economic incentives in the finance industry, or at least in commercial banking, favor rapid and aggressive consolidation. Not enough disincentive exists to offset the externalities this creates. Maybe we should tax banks based on their sizes; maybe we should do that in the form of some kind of insurance premium.
But since anything we'd do to address any of the real problems is going to require bipartisan cooperation, first we need to be candid about what the problems are.