by Patrick Sims, Director of Research, email@example.com, (202) 822-1205
So Mark Whitehouse hates big banks. We get it.
We disagree with his points, and there is a point-by-point rebuttal below, but this all comes down to one fundamental question: Do large global financial institutions actually provide value in a large global economy?
We would argue that they do. Nothing that we have seen in the business world presents compelling evidence that small or even regional banks are capable of providing the transaction support, the hedging strategies, the lending facilities, the payment options or the many other financial needs of companies operating on a global scale.
If you think that community banks, regional banks, or even super-regional banks can perform all of these services, then Mark Whitehouse may be right. Blow it all up and to hell with the consequences. But if you think that maybe they can’t, then you really want to try to fix the too-big-to-fail problem through regulatory changes, and that is exactly the process that is underway right now