Quote:
Originally Posted by Cowboy89
Why can't we learn from history? This is what happens when people start doing things for the sake of getting their pound of flesh as opposed to doing what's sound. A significant move backwards towards smaller, local financial institutions could create another Savings and Loan crisis like in the 80s when there is a panic and these smaller banks and credit unions can't handle the liquidity crunch.
Pretty much the big reason why the Canadian model is being reconized as the best internationally is because we have a oilgopoly of a few large Schedule 1 banks that service every market everywhere in the country. That basically ensures the banks don't make as risky loans, because the marketplace doesn't force them to (Because there's less competition). When there's a problem they're big and can handle the liquidity crunch.
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Not only are they "too big too fail" but they are fairly heavily regulated. The Government, from what I understand, says, you can have a oligopoly, but here are the rules you have to play by....win-win.
In the U.S. the problem is the big banks were unregulated and took even larger risks our Schedule 1 banks are prohibited from doing so.
EDIT: I should also point out that small credit unions are slow to adapt to technology, it's only recently that some have been able to process email money transfers...and I wouldn't be surprised if that's largely piggybacking on the infrastructure put in place by the big banks.