Daily News: April 30, 2012

Specialty Lender Says Economy Would Benefit From Big Bank Breakup

In an opinion letter article that appeared in the American Banker, Cobra Capital president Dale Kluga says, “There’s a potential economic payoff from the growth that would come from breaking up the big trillion dollar banks.” Kluga notes that “breaking up the big banks will create more competition for the most important source of any jobs recover – U.S. small businesses.”

In his letter, Kluga notes that our human “economic philosophy” by its very nature is exactly what got our biggest bank in trouble. “Somehow we have ramped up our big bank share of U.S. output to 56% from 43% within only four short and chaotic years.” Kluga goes on to use as an historic example his former employer, Continental Illinois National Bank, which he characterizes as “tracking this exact arrogant, do-no-wrong fact pattern which, lets not forget, was the largest failure in U.S. banking history at that very scary time back in 1984.”

To view the full text of Dale Kluga’s letter to the American Banker: