Should government impose size limits on the size of financial institutions?

  • Too big to prosecute!

    Accountability is the main issue here. Many more have explained it better than I. If there are no consequences legally or financially for risk taking, then these institutions will take on more risk. It is unethical for just a few corporations to have some much control over the politics and financial well-being of a nation.

  • Financial Institutions should never again be too big to fail.

    The tax payers have already bailed out large financial institutions once. I do not think they should ever be allowed to even come near that position again. Also, the institutions were so large that they were no longer careful. I think the institution felt like they were too big to fail, even without the tax payers, so they made a lot of risky investments. They became too powerful.

    Posted by: C45PKenji
  • The government prevents monopolies in other areas of business, like communications and utilities, so why not in the financial sector, as well?

    A monopoly is a monopoly, and the last time I checked, they were illegal. With this being said, it is true of every industry, except in the financial sector. Several things go unchecked and unregulated in this sector. It would only be constitutional and responsible to limit the size of financial institutions.

    Posted by: J Lamb 43
  • It has recently been shown that many massive financial institutions in the U.S. have willingly acted irresponsibly given minimal restrictions.

    With the economic collapse we witnessed in 2008, it would be foolish to continue to allow the major financial institutions to operate with the same unrestricted freedom that they abused in leading to the collapse. Placing restrictions on these institutions would reduce the number of banks that are considered "too big to fail."

    Posted by: UnknownClaud41
  • The government should impose size limits on the size of financial institutions because, the larger the financial institution is, the more cost it requires to sustain the institution.

    For example, if you look at the larger banks in the Unites States, you find that banking with them involves an increase in fees. When I moved to a smaller bank, my fees were reduced significantly. I believe the larger the institution, the larger the fees required to sustain the institution.

    Posted by: RoyalNapoleon27
  • Giant financial institutions are dangerous and offer no efficiencies, so we should limit their size.

    In the last few years, hundreds of U.S. banks failed with almost no impact on the economy, while keeping a few dozen other banks alive has cost taxpayers hundreds of billions of dollars. What accounts for the difference between the treatment and impact of the two groups of banks? The most important difference is the size of the institution. Failure of small and medium banks are routinely handled by the FDIC. When very large financial institutions fail, it can create harmful ripple effects and cascading bank failures, so governments feel strong pressure to use taxpayer money to prevent failure. Limits on the size of such institutions, combined with limits on leverage, would be an important step to protect both the economy and taxpayers. The banks will argue that larger size benefits the economy by making the companies more efficient. But studies have found that larger banks have higher fees and pay lower interest rates to depositors, compared to small banks.

    Posted by: LuciaL
  • No, because we are a free country and society, and government intervention is always, and always will be, a horrible thing.

    The government has zero rights to limit anything in a free market. That being said, they also should have no ability to bail anything out. Let failing things fail, and let the free market actually do its job. I'm more upset about a government using the ability to bail out institutions rather than letting them get as gigantic as they've become. There is zero reason why a government should be involved in the daily running of a bank.

    Posted by: C4rrFinaI
  • The danger of having only a few large financial companies is very severe and runs against the anti-trust laws of the U.S.

    The U.S. has only a few financial companies of major influence while the thousands of smaller financial firms are not considered important and instead are viewed as disposable. This situation presents a few problems. The major financial companies may make large, dangerous gambles in the future with the belief that the American taxpayer will stand behind them with bailouts. Also, the problem exists where the few firms could be involved in collusion and that would result in anti-competitive situations.

    Posted by: ChotAnguris
  • The government should start by regulating its own size.

    One of the largest financial institutions in most developed nations is the Central Bank. In the United States, the Treasury is also coupled with the semi-private Federal Reserve. The U.S. Government also has the psuedo-private Fannie Mae and Freddie Mac, corporations that made millions of high risk home loans with the government's financial backing. Sallie Mae, the student loan division, was semi-private with the government offering funds and Sallie Mae taking a profit for administering the loans. The Sallie Mae student loan division was re-nationalized under Obamacare, so it is now entirely owned by the federal government. Many people now pay their student loan payments and mortgage payments to the federal government and must seek these types of loans from the feds because private business cannot compete when the government can offer printed money and subsidize it with tax dollars. Government has become the largest financial institution. Government's finanical role should be slashed before it can impose any size restrictions on a dwindling private financial sector.

    Posted by: Pir4And
  • The government should print its own currency and that will limit the size of the financial institutions.

    If the government takes away the ability of the Federal Reserve to print money, then the banks will have no power over the government in the form of interest owed, and they will shrink naturally.

    Posted by: langga
  • The government should not impose size limits on financial institutions, because it hurts the free market.

    If the government interferes with the free market too much, then it reduces the desire of individuals and companies to try to succeed and, therefore, new ideas and inventions are hindered. In the case of banks, if the government tries to limit the size of a financial institution, then the bank will not try harder to make profits due to the imposed limit, which would hurt their shareholders.

    Posted by: SoWinif
  • The government should stay out of the business of financial institutions, unless they are doing something illegal.

    If a financial institution is successful, there should be no penalty for it. If it worked like that, where is the incentive to try to keep getting better? The other part of this I don't like is that, at first, financial institutions, but then what is next? It just seems like another way the government could easily start abusing its power.

    Posted by: R04chGrov
  • The government should not impose size limits on the size of financial institutions, because it is not constitutionally defined as a power of the government.

    The government should not impose size limits on the size of financial institutions. The powers of the federal government are clearly defined in the Constitution of the United States of America. Controlling the size of financial institutions is not defined as a federal power, and should be reserved for the states. The federal government has no legal power to meddle with business.

    Posted by: JamieM
  • No, the government should not impose size limits on the size of financial institutions, unless it is an actual monopoly.

    The size of financial institutions should not be limited by the government. The government has the authority to control monopolies, in order to protect the rights of the consumer. But there is no reason to limit the size of a company, as long as it continues to serve the consumers and stockholders in the best way possible.

    Posted by: MannP4rk
  • The government should not impose size limits on financial institutions because that is too much involvement.

    The government should not impose size limits on financial institutions because there are institutions that can be responsible. The government should impose greater penalties for abuse in the industry, and then enforce the laws. They should also not allow monopolies for fear of price gouging.

    Posted by: BGraham
  • governments should not impose size limits on financial institutions.

    Financial institutions are for profit businesses. I do not feel the government should be able to impose size limits on any businesses. It is the American dream to have a prosperous business and the government has not right to decide when that business is prosperous enough. The bailouts of certain financial institutions, however, causes me an issue because I don't feel the government has any place in a for profit business. If these are the financial institutions the government would like to limit then would that not be defeating their own agenda?

    Posted by: w00tboycomic
  • No business is too big to fail not even the banks.

    Let the banks get as large as they want because the banks ultimately have an obligation to make money for their shareholders. If the bank is practicing unfairly or is exploiting consumers then proper regulators need to do their job and enforce the current laws we have that protect consumers have giant institutions such as banks. Lets remember that banks are businesses too and businesses are the backbone of our country. Maybe there are better ways to achieve the same results but by different methods that are more fair to the business model of the bank.

    Posted by: R3ubHockey
  • Government has helped enough by creating these huge super banks, I don't believe that they have the tools to take them down.

    The super banks required international support and a great deal of change of legislation to be created. I would not trust the government to take them apart, especially after the historical event of the breakup of the Bells into Baby Bells. Even if for a time it looks like a breakup has occurred, the nature of corrupted interests would allow them to come together again in fact, never separated outside of legal fiction in the first place.

    Posted by: groovybox

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