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Opinion
Phill Swagel

Don’t Make Banks Too Small to Succeed

Calls by former Citigroup Inc. Chief Executive Officer Sanford Weill and others to break up the big banks reflect lingering public fear and anger toward financial institutions that seem too big to fail.

These calls, however, ignore the unintended consequences of making our global banks too small to succeed: Much of the business will migrate to non-U.S. banks and the less-regulated shadow banking sector. Weill and the rest also neglect to consider key reforms that protect taxpayers from a potential failure.