OK, so we\’ve got several people saying that big banks need to be broken up so that none of them are \”too big to fail\”.
Hmm, not sure I agree really. Still, leave that aside for a moment, here\’s what Ritchie has to say about it:
And if ever evidence was needed of why we need financial transaction taxes to retrain bank trading this is more to add to the existing pile in its favour.
Err, no, actually, it doesn\’t.
What is being said is that the level of trading we\’ve got is just fine we\’d just rather that it was spread among more players so that no individual player is systematically important.
In fact, it\’s the very opposite of what Ritchie says.
Having looked at the problems in the banking system these wise men have decided that it isn\’t the level or amount of trading that is the problem. They\’ve decided that it\’s the concentration of risk that is. Thus they recommend dispersing the risk rather than reducing the amount of trading.
I also have this feeling that if financial transaction taxes were felt to be the solution they\’d have said so but maybe that\’s just me being picky.