The New York Times published this editorial supporting President Obama’s proposal to break up the big banks. Here is an excerpt:
In calling for new limits on the size and activities of big banks, President Obama has given the effort to enact serious financial regulatory reform something it lacked: a rational starting point.
The premise of the White House’s earlier approach to reform was that behemoth multitasking banks were an immutable fact of life and the best way to cope with them was to ensure that their failures would not endanger the rest of the financial system. As a response to the worst financial crisis since the Great Depression, “make the world safe for giant banks” was unsatisfactory.