Sunday, March 7, 2010
Banking Battleground
The article discusses Arianna Huffington of The Huffington Post and Rob Johnson, director of the Economic Policy Initiative at the Roosevelt Institute. This initiative is for people to move their assets from large mega banks to smaller local banks in order to force reform to large banks. While this may seem like a good idea but I could forsee this causing an issue with the lending of large sums of money.
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As kyle mentioned, there are some potential negatives of this move to smaller banks. Part of the reason that these big banks are getting bigger is partly due to their higher efficiency than smaller banks. However, I see why people are moving their assets to smaller banks as they saw the collapse of the larger banks, and are afraid of it happening again. Again, we will have to wait and see how this pans out. Sounds good and makes sense initially, but perhaps negative effects later.
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