Are large banks a problem to finance security?


US 1 dollar bills

Giant Bank-ruptcies.
Are large bank a problem to finance security?

Historically banks have been huge, giant or multinational companies, and even though, at the end of the 80’s decade in the 20th Century, all across the U.S. and the NAFTA countries (Mexico, U.S.A. and Canada) we lived fusions and acquisitions of small and regional banks by the “bigger” banks.

Europe and several Asian countries, twenty-five years later, a bit out of time, follow the example promoting similar initiatives, contributing to create a global finance web compounded of  gigantic banks.

And there’s a simple question:

Does it make any sense to have a finance-economic net where nodes are so big, large enough, that the collapse of a single one will pull down the whole system around the world?

Let’s briefly review History.  At the very beginning of the 80’s decade, still in the Cold War, the super giant AT&T Corporation, then the leader and largest telecom company in the world, was chopped off into several smaller companies in a “painful” action for the US government and people, but it was done because strategic reasons behind, they understood an attack, a bankruptcy or even just a few management wrong decisions could derive in a global compromised situation and a disruption of the global telecommunications in the entire world.

May be today we’re facing a similar severe problem in the finance global system.  Very recent history has shown us the structural failure it supposes when having so huge finance centralizers in the global system.  The burning down of Lehman Bros. bank in September 2008 lured on a global collapse of worldwide finance network system spreading out the seeds for national and local crises, which wouldn’t happen if it were just a small or regional bank, concluding as an anecdotic fact to analysts.

The bailout and preventing banks from bankruptcy in the U.S. and in the rest of the world is resulting in a tremendous finance effort compromising social and economic development for several decades, or even for a whole generation.

Should those banks, whose burning down could be a menace to the global system be chopped as it was done in the Eighties with the telecom leader AT&T?

Answer our poll.


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AZ advisors consulting es una empresa especializada en desarrollo de estrategias empresariales para el desarrollo de negocio off-line y on-line mediante modelos de simulación, centrándose en el comercio electrónico.