Simon Johnson is fairly optimistic that a degree of sanity may return to the banking business. He argues that U.S. megabanks are doing well despite an increase in regulation, while European banks are doing poorly in their relatively unregulated environment. He has hopes for the return of Glass-Steagall as Senator McCain has joined Senator Warren & Company in pushing the bill.
He does, however, point out how highly leveraged the banks are; for example, JPMorgan has only 5 to 8 percent of its balance sheet in equity.
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