Michael Lewis: 'Goldman Needs To Be Busted Up Into Smaller Pieces'

02/04/2013 02:37 pm ET
  • Bonnie Kavoussi Master's student in economics, the University of Michigan

Michael Lewis, he of Liar's Poker and Big Short fame, says that it's about time to break up the banks.

"Along with the other too-big-to-fail firms, Goldman needs to be busted up into smaller pieces," the world-famous author wrote in a new article in The New Republic, published Monday.

Lambasting the government for its lackluster response to the financial crisis, Lewis wrote that the U.S. government essentially let the banks "bribe public officials" into maintaining the status quo by implicitly promising lucrative jobs to lenient regulators.

Across the pond, the United Kingdom has begun to consider serious action against too-big-to-fail banks, with George Osborne, the United Kingdom's chancellor of the exchequer, declaring as much on Monday. The same can't be said of the U.S., where the Obama administration has resisted calls to break up big banks, and many Congressional Republicans want to repeal the Dodd-Frank Act's provision for winding down failed banks.

Goldman Sachs itself has a long history of lobbying against financial reform and received a $10 billion government bailout during the financial crisis of 2008 (which it swiftly repaid). But in November, CEO Lloyd Blankfein acknowledged that supporting too-big-to-fail banks has its drawbacks. "For the first time, it's clear that size and complexity come with a higher cost," he said.

Earlier on HuffPost:

The 10 Biggest Banks In The U.S.

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