Increasingly, leading bankers repeat versions of the argument made recently by E. Gerald Corrigan in his Dolan Lecture at Fairfield University. Corrigan, former President of the New York Fed and a senior executive at Goldman Sachs for more than a decade, makes three main points.
- “Large Integrated Financial Groups” – at or around their current size – offer unique functions that cannot otherwise be provided. The economy needs these Groups.
- Breaking up such Groups would be extremely complex and almost certainly very disruptive.
- An “Enhanced Resolution Authority” can mitigate the problems that are likely to occur in the future, when one or more Group fails.
These assertions are all completely wrong. Continue reading “Gerry Corrigan’s Case For Large Integrated Financial Groups”