Does the big US banks needs to be broken up?

With the US Presidential elections looming,the question on whether "The Big US banks needs to be broken down " becomes relevant again.

Here are the top six and their total assets:

1. Bank of America Corp., $2.264 trillion
2. J.P. Morgan Chase & Co., $2.246 trillion
3. Citigroup Inc., $1.957 trillion
4. Wells Fargo & Co., $1.260 trillion
5. Goldman Sachs Group Inc., $937 billion
6. Morgan Stanley, $831 billion

After the 2008 financial recession,the Obama administration introduced the Dodd Frank legislation,which is a massive piece of financial reform legislation as a response  The act's numerous provisions, spelled out over thousands of pages, are scheduled to be implemented over a period of several years and are intended to decrease various risks in the U.S. financial system.

However statistics reveal that the despite the legislation,these banks have continued to get bigger.

Failure of these banks could take down 50% of the US economy along with it.

These banks have often indulged in blatant misuse of power they have gained by monopoly in the market. Financial Industry Regulatory Authority (FINRA) has fined 10 firms a total of $43.5 million for allowing their equity research analysts to solicit investment banking business and for offering favorable research coverage in connection with the 2010 planned initial public offering of Toys"R"Us.

FINRA fined the following firms.

Barclays Capital Inc. – $5 million
Citigroup Global Markets Inc. – $5 million
Credit Suisse Securities (USA), LLC – $5 million
Goldman, Sachs & Co. – $5 million
JP Morgan Securities LLC – $5 million
Deutsche Bank Securities Inc. – $4 million
Merrill Lynch, Pierce, Fenner & Smith Inc. – $4 million
Morgan Stanley & Co., LLC – $4 million
Wells Fargo Securities, LLC – $4 million
Needham & Company LLC – $2.5 million

We haven't seen any of the executives of these banks being forced to face the law.Due to their size, these banks often get away by paying the million dollar fines and still reap rich profits.

The US election campaigning mechanism doesn't help the process either with Super PAC's financing the candidates they prefer.It's an indirect way of ensuring their sustenance.

Any one having a decent credit score can purchase a house in the US by putting down a down payment of 3-5% of the total value of the house.This system works as long as the economy does well.However in case of a recession,when people lose jobs ,they end up being homeless in a short span of time.Lack of a strong family system in many cases leads to depression and suicides.

Those in favor of the big banks argue that the banks reflect the state of the economy.Bigger the companies in the economy,its only natural that the banks would be huge in size.They also argue that breaking down the banks will not increase the quality of service or security of data.

 It would be interesting to see if the next President of the US follows up on the Dodd Frank Act and ensure that it gets implemented as scheduled.At present,the intent is only being shown by Bernie Sanders.

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