First I wanted to say that I have wanted to watch the movie “Too Big to Fail” for a while now, so I was happy to see that it was the topic of our blog post. Back in 2008, major banks and insurance companies AIG were considered “too big to fail.” Since 2008, these firms have only become bigger with the Bank of America-Merrill Lynch, JP Morgan Chase-Bear Sterns, and Wells Fargo-Wachovia acquisitions. To me, obviously if they were considered too big to fail then, there are certainly still too big to fail now. In the film, Timothy Geithner explained to Hank Paulson that an option to save some of these banks is to work out an acquisition deal between two of them. Hank looked at him puzzled and said something along the lines of “you want to make the banks that we have considered too big to fail even bigger?” It is counterintuitive, but given the situation it was the best move. Although they are bigger, added regulation will help to oversee that the banks are working ethically. So even though the banks are getting bigger and bigger, they can be more easily monitored. With the added regulation, it would be almost impossible for a company to put itself into a position to fail.
Although the notion of too big to fail still exists today, it is definitely not as concerning to me presently because of the added regulation. The companies that are too big to fail are closely monitored and would be unable to fall into the same situation as 2008. The only thing that I worry about, that hopefully won’t happen in my lifetime, is that the same cycle of deregulation and corporate greed will occur.