Sen. Elizabeth Warren supports new bill to break up big banks. Do you agree with her?

[jmowreader]

82. Sure. And this is how to do it

Start with the realization, thanks to the Glass-Steagall repeal, a bank with one branch is as fully capable of playing poker with its depositors' money and losing it all as is a bank with a branch in every populated place. So saying things like "a bank with over a thousand branches needs to be broken up" is counterproductive.

Also recognize that a bank can handle a combination of all these products: money storage, nonmortgage loans, mortgages, securities and insurance.

So force every bank, no matter how large, to choose to handle money storage and nonmortgage loans OR mortgages OR insurance OR securities, and completely divest themselves of the other three.

Thirty years ago it was safe to let money-storage banks sell mortgages, but after the mortgage crash of a few years ago that's no longer the case. And it never was safe for them to sell securities. Break them up on functional lines because the number of branches isn't as important as the number of risks they're taking.