A
alan g
Guest
If the failure of any institution puts our entire financial system at risk, should we limit the size in order to limit the consequences of failure?
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If a financial institution is "too big to fail", is it also too big to exist?
G
Gaspode
Guest
Yes. And if it serves a purpose, it WILL be replaced by something better.
D
Darling J
Guest
Actually, yes.
Thankfully, the current administration thinks the same thing. The problem, though, is what to do with those mega-corps.
New regulations are on the horizon to ensure that, in the future, no one company can impact the US/Global economy to such a degree.
Basically, there won't be any new "AIGs", from what I can see.
Thankfully, the current administration thinks the same thing. The problem, though, is what to do with those mega-corps.
New regulations are on the horizon to ensure that, in the future, no one company can impact the US/Global economy to such a degree.
Basically, there won't be any new "AIGs", from what I can see.
par8hds unite
New member
While I agree to an extent I have a problem with the govt ruling over any private institution. basically when the govt gets in the way things get messed up b/c they think they know how to run that business or should be making decisions for that company. On the flip side I don't like the idea of 1 or 2 companies being so large that their failure means disaster for a countries economy.
I think there has to be some regulation- but VERY LITTLE- by the govt. to try to ensure that when the company fails or falters the countries economy isn't totally messed up.
I think there has to be some regulation- but VERY LITTLE- by the govt. to try to ensure that when the company fails or falters the countries economy isn't totally messed up.
Z
[email protected]
Guest
Yes, I would agree with that sentiment...if it's too big to fail, it's too big...period.
J
Jason S
Guest
In a pure market capitalist system... yes.
That's the problem with modern day laissez faire economics. Adam Smith didn't envision companies so big that their failure would pose systemic risk to the whole economy, when he penned the theory centuries ago.
So unless people are willing to accept regular recessions sparked by the failure and collapse of one or only a few companies, you can't have it both ways. Either they are too big to exist or else people have to accept government intervention as a way of life. Whether it's through regulation or what the government is doing now, or both.
That's the problem with modern day laissez faire economics. Adam Smith didn't envision companies so big that their failure would pose systemic risk to the whole economy, when he penned the theory centuries ago.
So unless people are willing to accept regular recessions sparked by the failure and collapse of one or only a few companies, you can't have it both ways. Either they are too big to exist or else people have to accept government intervention as a way of life. Whether it's through regulation or what the government is doing now, or both.
P
Pfo
Guest
Not necessarily limit its size, but rather regulate it to prevent it from failing. Good companies grow, companies that provide useful and valuable services expand, but like all companies, are susceptible to market conditions that can cause them to fail. Preventing them from engaging in behaviors that unnecessarily increase risk while at the same time allowing them to grow and expand like good companies should is the best route to take.