Well it seems everyone but the politicians and Ben Bernanke are shouting to break up the big banks so we stop too bigger to fail. Thankfully the only people who matter are our legislators and since they have been cleanly swept into the back pocket of our financial oligarchs, none of these warnings will gain traction. It truly is amazing how powerful a small group of a few thousand Americans are (legislators plus a splinter of financial elite) is, able to withstand calls from the majority. Our de facto feudal system seems not much different from the 1400s... at least they let us own the land nowadays.

The latest to make the fruitless call is the central banker of the UK, Mervyn King

Via Bloomberg:

  • Bank of England Governor Mervyn King stepped up his call for governments to tackle the dangers posed by banks that are “too important to fail,” saying new capital rules won’t shield taxpayers from funding any future bailouts.
  • “The massive support extended to the banking sector around the world, while necessary to avert economic disaster, has created possibly the biggest moral hazard in history,” he said in a speech in Edinburgh late yesterday.
  • He indicated that one solution could be to split up banks and separate riskier activities from more stable businesses such as taking deposits.
  • “Capital requirements reduce, but not eliminate, the need for taxpayers to provide catastrophe insurance,” King said. He added it is “hard to see why” proposals such as those of former Federal Reserve Chairman Paul Volcker to separate proprietary trading from retail banking are “impractical.”

[Oct 15, 2009: Even Alan Greenspan Thinks the Banks Have Become too Large]