Steven Mnuchin addressed the Senate Banking Committee and opined that breaking up the big banks would be a ‘huge mistake.’ According to the Financial Times:
Mr Muchin said forcing a split in the banking business would lead to significant problems in the financial markets and the provision of liquidity to the economy and would be a mistake. ‘We do not support a separation of banks and investment banks,’ he said.
The threat that breaking up the big banks would lead to liquidity problems in the economy is getting tired. A study showed that during the 2008 de facto financial collapse, Main Street corporations had no problem tapping into the various short term funding capital markets, primarily the commercial paper market.
This post was published at Investment Research Dynamics on May 21, 2017.
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