Glenn Reynolds, today :
AT CNBC, SKEPTICISM ON BIG BANKS: 
Mega institutions (financial institutions and insurance companies come to mind) that become TOO BIG TO MANAGE are likely to become TOO BIG TO FAIL.
It is impossible for top management to effectively monitor what is happening in all the nooks and crannies which have proven themselves able to bring down the largest Goliaths. And the Boards of Directors? Too friendly, too close, not independent enough, chosen as “buddies” rather than for skills needed. They have for the large part failed to perform. Chris (“I still can’t find my Countrywide mortgage documents”) Dodd’s wife serves on many boards. Her consulting company has NO clients. Just one of many many possible examples of inappropriate Board appointments.
Mmmph. I’m not sure I agree, here.
While the logic is sound that there is a higher risk with larger banking institutions, this sentiment as expressed apparently makes the unwarranted assumption that the banks in question would have failed absent the overhwelming level of governmental medding in the affairs of the bank.
For example, forcing it to make loans to one group or another for political reasons, who, in their turn couldn’t pay the loans back. There are other factors involved of course… This is a death of 1000 cuts we’re talking about here, after all… yet this is the biggest.
It is seldom indeed a bank fails on it’s own, and even more rare that an economy fails without governmental help.
Yet, we’ve seen many banks, and an entire economy fail… all of it as a direct result of trying to buy minority votes with bank loans. So, the question, then… if the problem is the meddling in the business of the banks that causes the failures, does it stand to reason that the solution to that problem should be increasing the meddling in the banks so as to restrict their size? Seems to me the solution being offered is a diversion from the real problem.