To hold someone/thing accountable for their actions is to let them take the fall when they fail. The size of these institutions prevent us from letting them do that.
it doesn't neccessarily mean lettign them fall, though that is an option..... another option might be bailing them out with certain terms to be guarateed ( which we didn't do in this last fiasco)
there are lots of firms that would cause great pain to our economy if we allowed them to fail, but no one is callign to break up GM or Ford..or GE... or any of the big firms..... targeting banks is simply populist claptrap.
I do think that you're absolutely right in that we'd have to get rather creative in what those punitive actions are. Look at Dick Fuld, Lehman Brothers was a company that we did hold accountable by letting them fail, and now he's worth just a mere $100 million and living it up in his Manhattan penthouse (poor guy).
the aim isn't to kill them off or drive them into poverty.. it's to change the behavior....
if that dude was a billionaire before, leaving him with a 100 million is probably still a good punishment.... banishing him from his tradecraft would be a nice addition, though.
I agree that limiting their size is a legal quagmire, but I do think it has an advantage over limiting behaviour in that it is a far more certain bet in terms of preventing a similar crash happening. There's still no consensus as to whether Glass Steagall would have helped prevent 07/08, nevermind other newer, untested regulations.
I tink it would simply mean, in the event of a crisis, that we would have wider and depper problems to address... you have to consider that the entire indutry is incestuous by nature...big banks, small banks, medium banks... they all live and die by each others swords.
... and then there is the fact that we would end up with far more firms requiring far more resources to adequately if we split them up.
I don't think we would decrease any risks by splitting them up...I think the root problems would get worse.
it's going to take some very smart folks to solve these problems... ideologues shouldn't apply or even pretend to think they have the answers to these very complex issues...even if those "solutions" sound good to the uninformed populace.
for my money, the solutions are going to come from the banks themselves... they have a vested interests in solving principal-agent problems, and they have the people whom are smart enough to do so....teh federal government, and hte state government, just have ot provide " incentives" for them to do so... incentives like " solve it or spend a ton of time in club fed":lol: