The Big Keep Getting Bigger: Too-Big-to-Fail Banks 30 Years Later

4 Pages Posted: 14 Oct 2014

See all articles by James R. Barth

James R. Barth

Auburn University; Milken Institute

Moutusi Sau

Milken Institute

Date Written: September 24, 2014

Abstract

The most recent financial crisis made it clear that something had to be done to make sure that big banks would never again pose such a systemic threat to the financial system that they would have to be bailed out by the government. The main purpose of the Dodd-Frank Act of 2010 was to direct financial regulators to implement reforms to ensure that this would indeed be the case. In view of all the concern today over some banks’ being too big for regulatory comfort, this article offers a look back at the circumstances that gave rise to the decision that bank size per se could be a key factor, and how it came to be that big banks that encounter financial difficulties are treated differently from smaller banks. It maps bank consolidation to show how banks and big bank holding companies have gotten much bigger over the past 30 years.

Keywords: Banking, Too big to fail, Regulation, Dodd-Frank, Capital Regulation and Supervision, Financial Liberalization, Banking Crisis

JEL Classification: G21, G28, F3

Suggested Citation

Barth, James R. and Sau, Moutusi, The Big Keep Getting Bigger: Too-Big-to-Fail Banks 30 Years Later (September 24, 2014). Available at SSRN: https://ssrn.com/abstract=2510041 or http://dx.doi.org/10.2139/ssrn.2510041

James R. Barth

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States
334-844-2469 (Phone)
334-844-4960 (Fax)

Milken Institute ( email )

1250 Fourth Street
Santa Monica, CA 90401
United States

Moutusi Sau (Contact Author)

Milken Institute ( email )

1101 New York Avenue, NW
Washington, DC District of Columbia 20005
United States

HOME PAGE: http://www.milkeninstitute.org/about/our-team/view/150

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