Reply #5: Don't like this one [View All]

The amendment would limit the size of a bank's total assets to two percent of GDP

Since that is a constantly changing number, it would seem problematic. Furthermore, I'm not sure what is so magical about 2%. And it implies that somehow 2 smaller banks failing is tolerable, but 1 large bank, twice the size, would be intolerable. There is a certain amount of "herd mentality" anyway on wall street and just because they are technically separate banks doesn't mean they won't be taking the same risks at the same time. It can still bring down the system when alot of them start failing at the same time. The real solution is regulating the risk they can take, and empowering the government to do orderly shut downs of failing institutions. Buried in there might be an incentive to to get too big, combined with risk. Because if you do, the fed is going to be interested in shutting you down sooner rather than later.