Right now, the banking system is doing well. If history is any guide, however, some banks are currently reaping a lot of future troubles in these heady times. Until recently, many banks were falling all over each other to lend money to companies in the developing nations of Asia. Look at the number of personal bankruptcies. Bankruptcies are up for a lot of reasons, but bankers share some of the blame for shoveling credit cards at consumers with abandon.
Consolidation is all the rage.
The industry is being deregulated and nationwide banking is a reality. Big banks can better afford the huge investments in technology that financial services firms need to make today to remain competitive. Still, the consolidation imperative means the government's safety net for uninsured depositors is being extended. The Minneapolis Fed reform idea has the virtue of modesty. It would tap the power of the market without upsetting the safety net that most people have come to rely on.