You know we've reached code red "Outrageous" when even "hands off" Alan Greenspan believes the banks have become too large. As many sensible people have said, anything that is "too big to fail" is TOO big period. Something I've posted on the website many times is the large financial entities are now just like Fannie Mae (FNM) and Freddie Mac (FRE) in that everyone knows deep in their hearts that the government would come to their rescue - which gives them an inherent advantage. How can small and medium sized banks compete? They cannot - while JPMorgan (JPM) and Goldman Sachs (GS) claim they are "government free" - they are not. They are like Fannie and Freddie have been for decades... institutionally protected and due to that they have will always receive cheaper funding than medium and small sized financial institutions, because investors know the money they invest will be backstopped by the US taxpayer. Which is why it roils me to no end when I hear these banks claim they are "free of government" and should "do as they please". We have ring fences our top oligarchs and implicitly backstopped them.

Will it change? No - but now you even have the Chief Provider of Narcotics to the financial industry for 2 decades worried about the Frankenstein he has helped birth. The same solution should be applied to these banks as should of been done to Fannie and Freddie; split them into 10, 15, 20 however many are necessary and let them compete with each other. The best win, and the worst fail... and when they fail they are of a size as to not bring down the entire global system. I cannot stress enough not only have we not moved in that direction but we've moved in the OTHER direction, our top dogs are now even bigger than before.

As you note the dogma of "thousands of banks competing in the US marketplace", I will continue to post in each of these entries the dominance in assets held by our largest oligarchs - the big 4.