The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill. Congress was told that if the too big to fail banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression.
Since that time, however, essentially no efforts have been made to decentralize the U.S. banking system. Instead, the too big to fail banks just keep getting larger and larger and larger.
Back in 2002, the top 10 banks controlled 55% of all U.S. banking assets. Today, the top 10 banks control 77% of all U.S. banking assets.
Unfortunately, these giant banks are also colossal mountains of risk, debt and leverage. They are incredibly unstable and they could start coming apart again at any time.
None of the major problems that caused the crash of 2008 have been fixed. In fact, the U.S. banking system is more centralized and more vulnerable today than it ever has been before.
It really is difficult for ordinary Americans to get a handle on just how large these financial institutions are. For example, the "big six" U.S. banks...
Bank of America
now possess assets equivalent to approximately 60 percent of America's gross national product.
Read the whole depressing story here and remember, when America sneezes we, in Britain, always manage to catch the flu!