George Will explores the virtues of Romney taking on Too Big to Fail:
If in four weeks a president-elect Mitt Romney is seeking a Treasury secretary, he should look here, to Richard Fisher,
president of the Federal Reserve Bank of Dallas. Candidate Romney can
enhance his chance of having this choice to make by embracing a simple
proposition from Fisher: Systemically important financial institutions
(SIFIs), meaning too-big-to-fail (TBTF) banks, are “too dangerous to
permit.”
Romney almost did this in the first debate when he said the
Dodd-Frank Act makes TBTF banks “effectively guaranteed by the federal
government” and constitutes “the biggest kiss that’s been given to — to
New York banks I’ve ever seen.” Fisher, who has a flair for rhetorical
pungency, is more crisp:
There are 6,000 American banks, but “half of the entire banking industry’s assets”
are concentrated in five institutions whose combined assets amount to
almost 60 percent of the gross domestic product. And “the top 10 banks now account for 61 percent
of commercial banking assets, substantially more than the 26 percent of
only 20 years ago.” The problems posed by “supersized and hypercomplex
banks” may, Fisher says, require anti-obesity policies equivalent to
“irreversible lap-band or gastric bypass surgery.” The land of TBTFs is
“a perverse financial Lake Wobegon” where all crises are “exceptional,”
justifying “unique” solutions that are the same — meaning bailouts. This
incurs “the wrath of ordinary citizens and smaller entities that resent
this favorable treatment, and we plant the seeds of social unrest.”
