It's been almost six years since the financial crisis of 2008, but people are still asking: Are there banks that are truly too big to fail?
According to two experts in the banking industry who spoke Friday at a forum at Penn State Dickinson School of Law, the answer is no.
It's such a resounding no, in fact, that Harvey Rosenblum, a retired executive vice president at the Federal Reserve Bank of Dallas, devised his own plan to combat what he sees as inefficiencies in the current Dodd-Frank Act, the government's answer to keep banks from being too big to fail.
And Wayne Abernathy, executive vice president for financial institutions policy and regulatory affairs at the American Bankers Association, explicitly said there are no nongovernment-entity banks that are too big to fail.
"Failure has to be an option for the biggest banks," Abernathy said. "We want the guys who aren't allocating their resources wisely out of that business."
Rosenblum said the Dodd-Frank Act has weakened not just the economy but the country itself, and enemies of the United States have taken notice.
"Our enemies realize this and treat us like the toothless tiger that we are," he said. "The Ukraine. Russia. 'Too Big to Fail' left us dead broke as a nation."
Friday's event occurred at the University Park campus and was simulcast to the Carlisle campus.
The panel covered the history of government bailouts for banks — including the bailout of Philadelphia-based First Pennsylvania Bank in 1980 — and how the government bailouts after the most recent recession shaped where the country is today.
The government had followed unwritten "Too Big to Fail" rules over the years, the panelists said, but everything changed when Lehman Brothers Holdings Inc. was left without the government's help when it failed in September 2008.
Just six months earlier, the government helped Bear Stearns Companies Inc. survive amid disaster.
"No one knew what the rules were anymore," Abernathy said.
Both Abernathy and Rosenblum said they believed another recession or even depression could be on the horizon, but that it could come from somewhere other than banks, though they didn't elaborate on where it could come from.