“Too large to fail” are yet in some ways small fry

“Too large to fail banks” are regulatory peccata minutiae when compared to that of having created the credit rating agency’s oligopoly. The opinions of the credit rating agencies, that the regulators induced, brought on much worse systemic concentration of risks than the “too large to fail” banks.

And don’t get me wrong I was one of the few ones who spoke out against the “too large to fail” while they were still considered to be too large to fail and people kept mum about them. While an Executive Director at the World Bank in May 2003 I told a workshop of some hundred regulators for all over the world “Knowing that the larger they are, the harder they fall, if I were regulator, I would be thinking about a progressive tax on size”.