, Columnist
Big Banks Use a Footnote to Look Smaller
The size and risk of banks remains elusive.
One thing that makes banking regulation hard is that it's impossible to know how big a bank is. There are lots of regulatory reasons why you might want to know that -- is it too big to fail? too big relative to its capital? -- but you just can never quite measure it. You get out your giant tape measure, and you try to wrap it around the bank, but the bank squirms and oozes and you can never quite see all of it at once.
This shimmering evanescent quality is, to the connoisseur, part of what makes banks so beautiful. But not everyone is a connoisseur. Some people find banks ugly, and the bigger, the uglier. But these people, too, run into the measurement problem: How can you know how mad to be at a bank, if you can't tell how big it is?