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Are Banks Too Big to Manage?

The Citigroup Center in New York City
The Citigroup Center in New York CityPhotograph by Daniel Acker/Bloomberg

Have banks become like farm-raised turkeys? In the name of progress, we raise birds so large that some struggle just to stand up.

While that image is entertaining, smaller is not necessarily better when it comes to banks. Banks have a long history of trouble no matter what the size, going back to the 18th century, a time of frequent crises. The 19th century experienced even more troubles: From 1900 through the mid-1920s, there were three major banking crises in the U.S. alone. More recently we’ve seen the U.S. savings and loan scandal, the Asian financial crisis, the collapse of Barings Bank, and the BCCI scandal.