How Much Bank Should A Big Bank Be?

8 Responses to How Much Bank Should A Big Bank Be?

1. Lukas says:

   March 11, 2011 at 8:19 pm

   The free market tried to break them up and the government didn’t allow it and bailed them out. Now we should break them up? How about we just stop intervening and let the market sort it out.
2. Yaacov says:

   March 12, 2011 at 8:51 am

   Lukas, I think you’re agreeing that big banks should be broken up. Is that the case?
3. Lukas says:

   March 14, 2011 at 8:17 pm

   Yes, exactly, but not by any regulation or government doing. The free market will handle too big to fail.
4. Yaacov says:

   March 15, 2011 at 11:47 am

   Ok, so we agree on what needs to happen, just not how. Can you give me some historical examples of when unregulated markets have broken up large, powerful companies?
5. Lukas says:

   March 15, 2011 at 12:19 pm

   Hmmm, I’ll have to see if I can find any really good examples, but quickly two examples I can think of are IBM and Microsoft. Two very large and powerful organizations who have been put in their place by the free market. It’s not that they are necessarily broken up, but lose market share to competition over time.

   Also, usually it is government regulations that allow or create these powerful organizations in the first place, so there may not be any great examples in the free market because competition takes care of the situation before they get “too big too fail”.
6. Yaacov says:

   March 15, 2011 at 8:59 pm

   How have Microsoft and IBM been put in their place by unregulated markets? MS still dominates the worldwide market in its three main products (operating system, browser, office suite) and IBM’s dominance was disrupted by technology change that made it’s main product (mainframes) obsolete. Unregulated markets haven’t broken up their monopolies.
7. Lukas says:

   March 15, 2011 at 9:57 pm

   Isn’t Apple a bigger player than Microsoft now? And sure MS might be hanging onto those 3 main products, but they definitely aren’t what they used to be.
8. Yaacov says:

   March 15, 2011 at 10:12 pm

   Apple remains tiny compared to MS. The only place where MS has less than 50% of the market is the web browser, which is the area where the U.S. and E.U. governments took anti-monopoly action. There Apple has 6% while MS has 40%. MS has over 80% share in operating system and office suite markets. Here’s the data.
   Web browser: http://www.w3counter.com/globalstats.php
   Operation system: http://marketshare.hitslink.com/operating-system-market-share.aspx?qprid=8
   Office Suite: http://www.pcworld.com/businesscenter/article/166123/forrester_microsoft_office_in_no_danger_from_competitors.html

   MS is definitely still a monopoly.