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Posted on Mar 22, 2009 in Featured, Finance Reform | 0 comments

Too big to fail, too big to exist

Too big to fail, too big to exist

The Internet is robust because if one computer fails, communications get re-routed. It is a distributed system. The same model could be applied to our banking system. The antitrust laws should have a “too big” provision – no one should be allowed to accumulate the power to bring down our whole economic system by their bad decisions. Although there are efficiencies to size, we now see that they come with increased risk. Just as high return stocks come with high risk. America needs a more conservative portfolio with its banks. Some may say that other countries will then become dominant. We can make size a condition of doing business in the US, or simply allow other countries to play Russian roulette with their banks. We’ll be safer in the long run.

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