Kevin Drum writes that banks shouldn't get too small, else they'd be... too small:
So just what would the limit be on bank size? $500 billion in assets? $200 billion? Can a country the size of the United States even have nationwide banks with limits like that?Why presume that America needs national banks? I'm not trying to be glib here, but seriously -- assuming that they're able to lend and borrow across state borders, why presume that America must have national-scale institutions at all? It's a way of framing a question so as to exclude an answer, and I don't see why we should bias policy in favour of a particular scale. Or, if we ought to be biasing policy, there are strong, positive reasons to bias it in favour of smaller institutions where corruption, if not less frequent, would have less severe secondary effects.