Monday, October 26, 2009

Why Banks Stay Big

"The trouble is that the “market” for banking is so distorted—by switching costs, by government subsidies and guarantees, and by the banks’ market power—that it’s hard to know whether big banks are adding value or are simply exploiting their oligopolistic positions. We do know that too much concentration in finance increases risk, since a handful of dominant players are more likely to make the same kinds of mistakes, and jeopardize the entire system."

in reference to: Why banks stay big : The New Yorker (view on Google Sidewiki)

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