Forum Post: 10 megabanks now have more assets than all 13,631 other US lenders combined, further solidifying TBTF
Posted 11 years ago on Jan. 3, 2013, 5:26 p.m. EST by toobighasfailed
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See data, chart, and sources here: http://www.switchyourbank.org/10_megabanks_assets
The biggest worry is that these megabanks continue to gain political power, which allows them to influence legislation to their advantage. What can we do to stop this? I've been working to build graphics like the one in the link, but I sometimes wonder if I could do more.
Also, see the Atlantic cover story released yesterday: "What's Inside America's Banks?" If you want to understand in 15 minutes why the megabanks pose such an enormous danger to the future of the global economy, this article is essential reading.
smash the monopolies.
The problem now is they are Too Big to Shrink.
Many economists and experts believe that breaking up the banks would help the economy. Including the Federal Reserve Bank of Dallas. Said so in their 2011 annual report. I think I read that the St.Louis Fed agreed with this prescription as well. Could be that the whole of the Fed agrees. They're too politically powerful to break up. The Repubnuts would go apeshit.
http://www.dallasfed.org/assets/documents/fed/annual/2011/ar11.pdf
http://www.dallasfed.org/assets/documents/fed/annual/2012winter.pdf
If the Fed and others want to shrink the big banks, then one obvious way is to shrink consumer credit card debt. The problem is that this is the banking industries bread and butter business.
Not only does ongoing credit card debt allow for higher ongoing profit margins, but when people fail to pay their monthly bill, no matter what the reason, the banks go to court and win ongoing judgements.
This then ruins the person's credit so that later on they will get charged higher interest rates.
So the cycle continues, and the big banks stay big. Banks can only shrink if they agree to reduce credit card debt by offering interest rate reduction incentives.
That's a real possibility (sadly). Still, I have hope for either a citizen-oriented shift, as described by Charles Ferguson here http://www.switchyourbank.org/charles_ferguson_quote or a government breakup of the megabanks.
One problem is the economic growth mindset requires that big banks keep getting bigger. This would explain why the government is remiss in incentivizing consumer debt paydown programs.
Think maybe the government is giving them the money to loan out and because of tighter restrictions, less and less people are able to qualify for loans.
I think that's the main reason - if people could borrow money then I doubt you would hear about it, but because people can't get loans then banks are flushed with money.
Hell they get it from the government at 1% so it really doesn't cost them anything to keep it.
Right, in a lot cases the megabanks have a bigger incentive to keep the money than to lend it.