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'Too Big to Fail is Too Big
by David Korten

David Korten responds to the first ever media interview given by a
Federal Reserve Chairman.

In a September 22, 2008 interview with Amy Goodman onDemocracy Now!,
Senator Bernie Sanders famously said that if a bank "is too big to
fail, it probably is too big to exist." That should be a watchword
slogan of any effort to fix the financial system. Major responsibility
for the financial collapse rests with the deregulation process that
allowed for the consolidation of banking power in the hands of Wall
Street. Reversing that process should be an immediate priority.

Before Wall Street there was Main Street

I recall the time when banks were community institutions that were
limited by law to being single outlet community service organizations.
It was called unitary banking. Each bank was rooted in and expected to
serve the needs of its community. Deregulation unleashed a wave of
consolidation through mergers and acquisitions that shifted the focus
from serving Main Street to making as much money as possible for Wall
Street. To have a financial system that works, we must reverse the
deregulation process and restore the concept of community banking.
Nothing less is going to solve the problem.


Wall Street holds government hostage

In a March 8, 2009 CBS Sixty Minutes interview with Sheila Blair, head
of the FDIC, it was noted that when one of the smaller banks fails, it
is taken over by the FDIC. The depositors are protected by the FDIC.
The owners, however, lose everything.

In the interview with Blair, which comes toward the end of the segment
documenting the FDIC take over of a small failed bank, she notes that
the FDIC doesn't have the jurisdiction to take over the large Wall
Street financial conglomerates that bear the major responsibility for
the financial collapse. As the moderator points out, the owners and
managers of the small banks are left with nothing. The big banks get
government bailouts.'
Lees verder: http://www.yesmagazine.org/article.asp?ID=3380