According to Carney, the "too big to fail" debate should unite both side, up against the big banks, because they:
have rigged the game so that they profit without creating value. In fact, they profit from activities that weaken the economy by creating instability. Today, big banks give capitalism a bad name. Believers in the free market should stop giving banks cover.Unfortunately these story are all too often very simplistic. These lines of argument overlook the fact that today's unstable situation is the result of a long process of financial deregulation. The end of the Bretton Woods system meant companies had to cope with floating exchange rate and banks responded by providing risk management instruments. They have rigged the game because the rules have slowly changed. Some players now (high frequency traders for example) benefit from risks. In fact it has become their risky job to cope with uncertainty. Whether or not that deters financial systems to carry on the main function they are supposed to fulfill - the efficient allocation of capital - is a question political economy. Arguing over the size of banks and trying to regulate it will be a useless debate unless we rethink the function of financial systems too.