James Pethokoukis –
I’ve noted that on several occasions Paul Ryan has been critical of big banks and seemingly in support of the Volcker Rule. Ezra Klein highlights those instances and wonders if Ryan is in favor of breaking up the big banks.
A few thoughts of my own:
1. I have explicitly asked Mitt Romney, Ryan’s new boss, about this:
PETHOKOUKIS: Richard Fisher, head of the Dallas Fed, recently called for the breakup of large banks. Should we break up the big banks to ensure financial stability in the future and avoid another “too big to fail” problem?
ROMNEY: I’m not looking to break apart financial institutions. I think what caused the last collapse was a convergence, almost akin to a perfect storm, of many elements in our economy and regulatory structure. … And if we have in place modern regulation and regulators who are keeping their eye on the ball, there’s no reason to think we will go into another crisis of the kind we just endured as a result of the mortgage meltdown.
2. Up until recently, my sources tell me,Team Romney was completely unaware that there was a “break up the big banks” (BUBB) movement on the right. Certainly his political advisers are unenthusiastic.
3. Yet, this is still a bleeding-edge policy issue among conservatives that many see at odds with the idea of deregulation and less government intervention. Of course, the counter argument is that the reason banks are so big and interconnected is due to government incentives like Too Big To Fail.