What I’d Ask the Banking Chiefs
Paul Solman: As the Financial Crisis Inquiry Commission gets under way this morning and the heads of biggest U.S. banks answer questions about what caused the financial crisis – and what to do to avoid a similar crisis in the future – I looked again at a list of proposed questions by the NYT’s Aaron Sorkin in yesterday’s paper. It’s a great list, and I’d just add one question of my own.
The one I’d add is the one we ourselves can’t get anyone to answer: If your bank is too big to fail, and the market system is premised on the possibility of failure, shouldn’t your bank be smaller? If not, why not? If so, how should it be downsized?
In short, what — if anything — is the economic justification for your current size?