Comment: 'No more bailouts' for too big to fail banks - is Carney right?

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Bank of England governor Mark Carney answers questions after addressing the annual TUC Congress in Liverpool, northwest England, on September 9, 2014. (PAUL ELLIS | AFP | Getty Images)

Mark Carney, the Bank of England governor, today declared that taxpayer’s cash should never again be used to rescue banks.

The governor set out a bunch of new plans aimed at forcing creditors to bail out banks getting into trouble rather than us.

Since the financial crisis, regulators and governments have done much to force our banks to raise more money as a capital cushion in the event of another financial meltdown.

But Mr Carney wants to go further: he wants to force the biggest banks to create an even bigger financial cushion. The bigger the bank, the bigger the cushion.

Now, in my view, Mr Carney’s moves are all well and good.

But they miss the whole point that the financial crisis and all those taxpayer bailouts made clear – we have allowed our banks to become way too big for our own good.

None of these additional measures would be needed if we had taken the opportunity to break up the megabanks while we, the people, had the upper hand during the crisis. Instead, we stood by as the megabanks made themselves even BIGGER by gobbling up the weaklings.

As a result, we have never in history had so few banks which are so systemically important.