This is because their customers have no interest in dividing these groups of banks. The financial help provided by Wall Street banks and other important international banks to different customers, requires that these customers also offer their help in protecting these banks from authorities' actions.
Another argument used by groups that are in the favor of too big to fail banks is represented by the fact that by attacking these banks, the businesses and governments they finance can be significantly affected. But there can be found solutions to such situations. Smaller banks can work together in order to finance important loans. However, this is not necessarily the most important argument that can be presented by advocates of the too big to fail issue because large banks provide this type of loan syndication also.
It is important to understand that both sides are right about some of the arguments they provide. It is obvious that the stakeholders in favor of the too big to fail banks' division are right about feeling the need to develop strategies intended to reduce the power of influence of these banks. But they must also provide solutions that are able to address the effects that this strategy can produce on companies, on national economies, and on the global economy.
In addition to this, such a strategy must be agreed by other countries also, it should not be limited to U.S. banks. Reports on the issue have revealed the fact that banks in Switzerland and in the U.K. have more difficulties in bailing out their banks in comparison with the U.S. It seems that the system in the U.S. can easier bail out large banks. This is not necessarily a good issue. Therefore, it is important to understand that the easy bail outs provided to large banks in the U.S. are possible because of several stakeholders involved in this process.
The federal governments that finance these bail outs represent the most important decision making factor in such cases. In addition to this, bank regulators and other types of regulators do not develop laws intended to protect the financial systems from the activity of...
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