Categories:
Finance: stocks, options, etc.
I have an article in National Review (April 5 edition) on financial regulation.
Notwithstanding the good intentions of policymakers, who no doubt plan to create a stronger regulatory apparatus going forward, large banks will inevitably have too much power for the apparatus to govern them…So long as big banking is conjoined to big government, that is, we risk a return to the regime of private profits and socialized risk.
…To expand free enterprise, shrink the banks.
Other articles on the topic are by Veronique de Rugy and by Stephen Spruiell and Kevin D. Williamson.
READER COMMENTS
Philo
Mar 23 2010 at 3:30pm
“To expand free enterprise, shrink the banks.” It would be better to arrange things so that the failure of even a large bank would not threaten the overall financial system. This would probably require an end to deposit insurance, as well as readiness and willingness for aggressive monetary policy.
Richard A.
Mar 23 2010 at 4:15pm
If everyone were to move their money from the big banks to the small banks, the big banks would shrink. Because of FDIC insurance, this would not be a risky move.
Arnold Kling
Mar 23 2010 at 5:50pm
Richard, “everyone” would have to include large institutions, who might have to forego higher returns
Stephen M
Mar 24 2010 at 1:33pm
Mr. Kling,
Perhaps it is a better argument “To shrink the banks, expand free enterprise”?
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