So if the banks are now healthy I propose we implement a program to encourage big banks to get smaller so they’re not too big to fail.
What I recommend is that we reduce or eliminate FDIC for too big to fail banks. Doing so would let consumers decide if they want to keep their money in a “too big to fail bank” or move to smaller bank offering FDIC. The hard part of deciding which banks are too big to fail has already been determined, so now we just need to implement this simple but very effective change. Also I would require all banks to disclose their financials and exposure to very assets classes in the lobby of the bank in electronic form for anyone to peruse.
Insurance encourages people to do unwise things. Eliminating it should create more rational behavior.
From DS news
FDIC-insured banks continued to show improving health in the year's third quarter, the agency reported Tuesday. Commercial banks and savings institution insured by FDIC reported aggregate net income of $37.6 billion in Q3, up from a reported $35.2 billion in Q3 2011. Meanwhile, negative indicators continued to fall. The number of banks on FDIC's "Problem List" declined for the sixth straight quarter, dropping from 732 to 694. The third quarter also marked the first time in three years that there have been fewer than 700 banks on the list. » Read More
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