Bernanke: shut down banks if threatening system

While letting a bad bank makes sense, Bernanke himself has helped make this nearly impossible. The problem of too-big-to-fail has been made worse since the crisis. The troubled bank list is growing by the day while the list of profitable banks shrinks. Concentrating profits in fewer and few banks is extremely dangerous until someone decides to break up this situation. Any talk about “too big to fail” is laughable until they decide to remake the banking system. Anyone happen to see anyone in Washington with the courage to do that? Me neither. The longer they wait, the larger the problem becomes and the more expensive it will be to fix it.

Federal Reserve Chairman Ben Bernanke told a panel investigating the financial crisis that regulators must be ready to shutter the largest institutions if they threaten to bring down the financial system.

“If the crisis has a single lesson, it is that the too-big-to-fail problem must be solved,” Bernanke said Thursday while testifying before the Financial Crisis Inquiry Commission.

If the lesson was so important, then why is he not doing anything about it? Why grow the problem?

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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