Has Too Big to Fail Been Solved?

The video discusses the idea of separating deposit-taking banks from investment banks, a concept supported by figures like Gary Cohn and Donald Trump. It explores the challenges and risks of such separation, including potential impacts on financial stability and competitiveness. The discussion also covers the political and economic motivations behind this idea, the role of regulation, and the ongoing debate about the effectiveness of current financial regulations in addressing issues like 'too big to fail'.

What is one of the main challenges in separating deposit-taking banks from investment banks?

• Reducing the number of commercial banks

• Determining how new investment banks would be funded

• Ensuring commercial banks have enough deposits

• Finding new customers for investment banks

What is a potential risk of breaking up large financial institutions?

• More government intervention

• Increased market share for small banks

• A less stable financial system

• Higher interest rates for consumers

Why might standalone investment banks like Goldman Sachs benefit from separating commercial and investment banking?

• They focus on small business loans

• They already manage funding challenges

• They have a strong retail presence

• They have fewer international clients

What was a primary reason for the creation of large institutions that combine commercial and investment banking?

• To reduce competition

• To meet client demands for a range of services

• To increase government control

• To simplify banking regulations

What is the current stance on regulation according to the discussion?

• Maintain current levels of rigorous regulation

• Reduce all regulations significantly

• Focus only on small banks

• Eliminate capital requirements

What is a key reason for the enthusiasm from Wall Street about rolling back certain regulations?

• Desire for less regulation overall

• Interest in smart regulation

• Need for more government oversight

• Preference for stricter capital requirements

What is a significant challenge in determining if 'too big to fail' has been addressed?

• Lack of new financial tools

• Absence of political support

• Uncertainty until a large institution faces trouble

• Increased competition from European banks