Bloomberg reports (October 15) that the former Chairman of the Federal Reserve told the Council on Foreign Relations in New York, about the banks:
“If they’re too big to fail, they’re too big, (…). In 1911 we broke up standard Oil – so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”
Let us add that in 1911 very large firms usually had a big competitive advantage over smaller ones, while the reverse is true today. All other sectors’ largest firms have been downsizing, on average, and the conglomerates of the 60s disappeared a long time ago. Indeed, the banking sector has been able to avoid such an adaptation because of state support.
Read the article here .
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