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Banking On Our Future

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Banking On Our Future

The Value Of Big Banks In A Global Economy

Hamilton Place Strategies,

5 min read
5 take-aways
Audio & text

What's inside?

Should large American banks downsize? What would fill the void?

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Editorial Rating

7

Qualities

  • Innovative

Recommendation

Following the 2008 banking crisis, many commentators have called for the breakup of America’s megabanks, which they see as too powerful and untouchable. Research analyst Patrick Sims disagrees. He believes the US’s big banks are too valuable to society to dismantle. getAbstract recommends Sims’s simple, well-argued – if somewhat one-sided – text to regulators and to individuals with a stake in the makeup of the financial sector.

Summary

The recent financial crisis has led many commentators to call for the breakup of large US banks. However, these analysts often overlook some critical points:

  • Large banks are valuable to the US and global economies – Big multinational banks are vital to US companies and investors operating in global markets. These institutions provide “trade finance, securities underwriting, currency hedging and interest rate risk management, transaction and payment services,” plus numerous other services that smaller banks cannot offer. Critics say that large banks are inefficient when they reach a certain size and that breaking them up would not harm the...

About the Author

Patrick Sims is director at Hamilton Place Strategies, a policy consulting firm.

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