Explore BrainMass

Big Businesses and Recession Risks

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

A long time ago, in a galaxy far, far away, there were businesses that were TOO BIG TO FAIL... Over the last five years we have seen a number of government interventions in operations deemed "too big to fail". Discuss.

© BrainMass Inc. brainmass.com October 17, 2018, 4:13 am ad1c9bdddf

Solution Preview

Lynch (2012) wrote that two years after President Barack Obama vowed to eliminate the danger of financial institutions that are too big to fail, the nation's largest banks are bigger than they were before the financial meltdown. Five banks JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs held more than $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve. That is up from 43 percent five years earlier.

Pressley (2010) mentioned that Alan Greenspan when told the dangers of outsized banking institutions replied back that "If they're too big to fail, they're too big".

So what to do with them, Greenspan blurted out "You know, break them up," and qualified the statement by saying that in 1911, we broke up Standard Oil. So what happened? The individual parts became more valuable than the whole (Pressley, 2010).

Greenspan's bold suggested could have made an ally with CEO Sandy Weill when he "publicly voiced the opinion that certain banks needed to be broken up" because "the merger of commercial banks with investment banks ...

Solution Summary

The solution discusses what to do to businesses that are too big to fail. It includes suggestion such as breaking big companies into smaller businesses so that investors/depositors will never be at risk.

Similar Posting

Global Operations - Apple Inc

Select a U. S. company with global operations. Write a 3-4 page project in which you do the following:

Discuss the firm's activities outside the U.S.

Identify which economic concepts, such as comparative advantage, apply to your firm.

Explain how these economic concepts can be used to address the firm's problems and opportunities?

Identify which economic and political policies affect your firm and explain how they impact business decisions.

How does your firm use technology to strategic advantage?

Discuss the impact of globalization on the firm's cost structure, markets, currency risk, and overall strategy. Be sure to provide a definition of globalization in your answer.

Use the Library, unit resources, and the Internet to find information. One resource is Hoover's Pro, available through the Library. Click the "Find Web Resources" button and use the Search Web Resources For box to find Hoover's.

Entering the site through the Library gives you access to more information than is available to non-subscribers.


Explain the macroeconomic and microeconomics concepts and how they relate to the management of a global organization.

Critically analyze and evaluate real-life economic problems and opportunities by applying economic concepts, principles, and theory.

Examine current global economic and political policies and their impact on business decisions.

Recognize situations that present potential ethical and legal issues and develop solutions for those issues.

Discuss the opportunities provided by technology for businesses.

View Full Posting Details