Greenspan: U.S. needs to consider the possibility of separation of major banks into parts

U.S. regulators should consider the possibility of separation of large financial institutions in the country that are now "too big to be bankrupt," believes the former head of the Federal Reserve Alan Greenspan.

These banks are hidden subsidies that enable them to attract funds at lower rates, because investors are confident that the government always takes part in the guarantee of their obligations, he said. This limits competition and creates a risk of the financial system, quoted him as saying the agency Bloomberg.



"If they are too large to be bankrupt, they are cumbersome. In 1911, we divided Standard Oil - and what happened?" Some parts are more expensive than the whole company. Perhaps this is what we should do "- said Greenspan .

He said that although the "real arbitrary division of organizations into several different-sized" goes against his philosophical beliefs, but something must be done to solve the problem of too large banks, the failure of which could endanger the entire financial system of the country.

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