If the architect says there’s something wrong with the building, then you know it must be true.
Last month, Sanford Weill -- a former Citigroup CEO who helped engineer our country’s financial system in the late 1990’s -- said:
What we should probably do is go and split up investment banking from banking... and have banks do something that's not going to risk the taxpayer dollars, that's not going to be too big to fail.
The man who helped conceive of the Wall Street megabanks that have a stranglehold on our economy now says it’s time to break them up. It’s confirmation of what you and I have known all along -- too big too fail is too big to manage, too big to regulate, and just too big a risk for the American people.
Even after the financial collapse, from which our economy is still recovering, the nation’s largest banks continue to grow. Today, the nation’s six largest banks are controlling assets equal to a shocking 64% of the U.S. Gross Domestic Product.
But the complexities of what they do -- and the risks associated with it -- haven’t changed. Earlier this summer, our nation’s largest bank made a trade designed to lessen its risk profile. Turns out that the move could actually wind up costing them as much as $9 billion.
Large, complex institutions undertaking large, complex financial activities have dangerous consequences, even at the best managed firms. The only way to truly protect our economic well-being, and the American taxpayers, from a repeat of what happened in 2008 is to end “too big to fail.”