As in medicine, so in banking: we deny the inevitable, death, at our own expense. There is a striking parallel between the U.S. health system, in which there is a marked unwillingness to speak frankly with dying patients about the costs and benefits of heroic measures, and the global banking system, in which the largest too-big-to-fail banks exist in a strange reality in which death is discussed endlessly but still practically impossible. Both systems produce perverse outcomes at great and unnecessary costs. In medicine, our unwillingness to take a clear eyed view of death’s inevitability, leads many to an even more miserable, protracted end, and one in which outsized resources are used. In banking, the existence of too-big-to-fail banks creates private gains at public expense, all while leading to a mis-allocation of capital in favor of large banks at the expense of capital markets and, essentially, everyone else. Despite having been mandated four years ago in the Dodd-Frank banking
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