One of the most accurate forecasters of the global economic crisis, Nouriel Roubini, said last week that last September's spree of bank takeovers deepened the crisis because it made the already-too-big banks even bigger.
He may well be right; more interesting is what this tells us about the U.S. banking system going forward.
"The institutions are insolvent," Roubini said in a Bloomberg Radio interview. "You have to take them over and you have to split them up into three or four national banks, rather than having a humongous monster that is too big to fail."
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Why concentrate of US banks? Buy Canadian where banks are profitable, do not reduce dividends and did not get seriously involved in the sub-prime mess. Most of them trade on the NYSE.
With 90,00 banks in the US, it is time for some (or many) to disappear. There is a great need for consolidation.
Ken Didier
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