Big banks became big for a reason and it would be a terrible idea to break them up, William Harrison, former Chairman of JPMorgan Chase, told CNBC's "Closing Bell."
"I think it’s a horrible idea to break up the banks. There was a reason why all the banks became large -- that is scale and efficiency. It wasn’t an unnatural act," Harrison said Wednesday. "The result of this has a lot of efficiency benefits for clients and customers both in the U.S. and around the world."
He is, of course, referring to former Citigroup CEO and Wall Street legend Sandford Weill's call to break up major commercial and investment banks.
Harrison, who helped build JPMorgan and Chase in 2000, argued that if the U.S. wants to compete on a global scale, then we must have large-scale banks in our corner.
“We have great companies, we have the best banks and our banks have an impact on creating the deepest capital markets in the world,” he said, adding that the U.S.’s economic standing in the world has been helped by this.
He also pointed out that the alternative to big banks would be smaller ones "that could not effectively serve their clients," as CNBC puts it.
Watch the discussion [via CNBC]:
Harrison noted that being smaller doesn’t necessarily mean things won’t still go wrong in the financial industry.
"There’s not a high correlation between complexity and failure," he said, adding that many of the firms that tanked during the financial crisis were fairly small in size.
He went on to note that government shares a portion of blame for the financial crisis and pointed out that being large helped JPMorgan deal with the massive billion dollar trading loss it suffered earlier this year.
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