« Links for 05-31-14 | Main | Links for 6-01-14 »

Saturday, May 31, 2014

Are Banks Too Large?

At Vox EU:

Are banks too large?, by Lev Ratnovski, Luc Laeven, and Hui Tong: Summary: Large banks have grown and become more involved in market-based activities since the late 1990s. This column presents evidence that large banks receive too-big-to-fail subsidies and create systemic risk, whereas economies of scale in banking are modest. Hence, some large banks may be ‘too large’ from a social perspective. Since the optimal bank size is unknown, the best policies are capital surcharges and better bank resolution and governance.

    Posted by on Saturday, May 31, 2014 at 11:01 AM in Economics, Financial System | Permalink  Comments (27)


    Feed You can follow this conversation by subscribing to the comment feed for this post.