Could the issue of “too big to fail” be something of the past – one that no longer requires government intervention? At a conference on Thursday sponsored by the Clearing House, an industry body, participants raised the prospect that some of the largest U.S. banks might be in the midst of evaluating whether they were able to do business as usual in an environment of sprawling regulations and escalating fines. In pondering how U.S. regulators might tackle the “too big to fail” problem, an issue that many say still hangs in the balance, Michael Wiseman, a partner at the law firm Sullivan & Cromwell, said there were two ways of looking at the issue. Under the first scenario there is a future collapse of a systemically important institution – such as Lehman Brothers -- which leads Washington to break up the largest banks. In this outcome, given the public rancor that would ensue, the industry would have no say in the final result. Alternatively, said Wiseman, one might look at the
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