Shrink, Don't Split, Big Banks

Shrinking banks are a welcome development in resolving the "too big to fail" issue.

The towers grow taller but the banks get smaller.

Photographer: Simon Dawson

Some of the world's biggest banks are starting to acknowledge that size isn't everything. It's a welcome development in the effort to solve the "too big to fail" problem, which thus far has been far too focused on the final pair of words as a potential solution (seeking to avert failure by concentrating on capital buffers), rather than the first two words (eliminating systemic risk by making the banks smaller). It's also proof that regulators are succeeding in nudging the world of finance toward a better place.

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