Break up the banks, says Minneapolis Fed chief

[jwirr]

19. The problem this article is discussing is that our 6 big banks

should be broken up into smaller banks (like they used to be) because they are "too big to fail". But the issue is not that they are big but that being big they are a danger to the world economy.

When one fails they run a huge risk of pulling the others down with them. That is where we were at in 2008. It was vitally necessary for the bailout because if we had not the world economy would have crashed and we would have found ourselves in another Great Depression.

Nothing has been done to protect us from that. The only thing that can be done is bring back Glass-Steagall to protect the accounts of individuals and then to return to smaller banks. It does not mean that a bank will not fail but if it does they will not be big enough to bring down the entire world economy.

I think the big banks do not like this idea because it has to do with the lose of power and nothing to do with the lose of money they hold.