Greenspan says break up the Banksters

One might ask where the hell Alan was when they were passing out the TARP money, but still this is significant.

U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said.

Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on Foreign Relations in New York.

“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

Of course, Greenspan is late to the party. Lots of people have said this already, but they were mostly those *unserious* DFH types who were so irritatingly right about Bushenomics all along. So if somebody in power actually listens to Greenspan now and acts on it, I'm willing to say, better late than never.


[More posts daily at The Detroit News]