Break Up the Big Banks

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Uploaded by on Apr 23, 2010

Cato Institute's Arnold Kling tells Will Cain that in order to solve the "too big to fail" problem we should consider breaking up the big banks.
Highlights:
1:20 - Big banks aren't the result of a free market in banking. In fact, their all quasi-governmental like Fannie and Freddie
4:40 - Aren't there economies-of-scale in having superbanks that outweigh the risks of these banks?
5:45 - Will limiting the size of banks rid us of the risk of bank failures? Kling says we'll still have bank failures, but hopefully won't be as prone to socializing their failures

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  • What is good for banks would be good for the government. We should take power away from the federal government. Senator Dodd has suggested breaking up banks to limit systemic risk. Let's try that with goverment.... You know, that 234 year old idea called STATES?

  • Interesting. How does this fit with CATO's advocacy of health-insurance being sold across state borders?

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