Time To End "Too Big To Fail"

Time to bust up the world's banking giants

Busting up the banking trusts is essential for the following reasons:

-It eliminates the too-big-to-fail issue, which puts entire economies at risk.

-Excessively large banks destroy democracies, like the United States, through inordinate influence on policy, politicians and regulators.

-Oligopolies and monopolies are economically inefficient and charge excessive fees, earn excessive profits and pay excessive salaries and bonuses.

-Oligopolies and monopolies don't innovate because they don't have to.

-Oligopolies and monopolies are risky because they indulge in groupthink mistakes that are too large for economies and the business community to bear.

-Oligopolies and monopolies fossilize markets by dealing with big entities, cronies, politically connected clients and nepotism.

-Oligopolies and monopolies hurt economies because of overcharging and gouging.

The world's concentrated financial sector has been grabbing more than its fair share of wealth because it has been able to and this must stop.

Despite the obvious benefits of busting up the bank trusts, the U.S. and other governments resist a Glass Steagall restructuring.

Washington's intransigence flies in the face of the anti-trust tradition in the United States.

Glass Steagall is the only reform that will work, which is why Bank of England governor Mervyn King and former Federal Reserve chairman Paul Volcker came out last week in support of a global Glass Steagall.

But Washington, London, Ottawa and others are counting on regulation instead, even though that didn't work. Their position is even less justifiable given the fact that the meltdown has increased concentration of banking power, with even more accompanying problems.

For instance, monopoly profits are why months after Goldman Sachs was given US$10-billion in taxpayer bailout funds it has amassed US$23-billion for bonuses this year -- an amount equivalent in size to the economies of Trinidad and Tobago, Estonia, Lebanon or Congo and Mongolia combined.

Goldman Sachs should be the first to be broken up. The firm would have disappeared without its US$10-billion bailout (which it paid back) and is still at the taxpayer trough, thanks to its conversion of part of its business into a deposit-taking institution to get US$26-billion taxpayer deposit insurance.