In 13 Bankers Johnson and Kwak make a strong case for breaking up the biggest banks as the only way out of the doom loop in the financial sector. So far, among leading bank regulators, only Mervyn King, Governor of the Bank of England, has made this case strongly; see: http://www.guardian.co.uk/business/2010/feb/25/mervyn-king-urges-bank-breakup. Today, in the New York Times, Thomas M. Hoenig, President of the U. S. Federal Reserve Bank of Kansas City, makes the case as well, in a fine short essay entitled “Too Big to Succeed”: http://www.nytimes.com/2010/12/02/opinion/02hoenig.html?hpw. Don’t miss it.
This is what we all need to keep in mind about the ongoing global financial crisis: It’s not over yet, by a long shot, and we still cannot see the bottom of the downside risk – a true black-hole risk.