Question A:
The U.S government should make further efforts to shrink the size of the country's largest banks — such as by capping the size of their liabilities or penalizing large banks more heavily through taxes or other means — because the existing regulations do not require the biggest banks to internalize enough of the "too-big-to-fail" risks that they pose.
Responses
© 2025. Kent A. Clark Center for Global Markets.
10%
10%
0%
10%
15%
41%
13%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
16%
19%
42%
23%
Question B:
The economic benefits to the U.S. of having a
handful of banks with balance sheets greater than $1 trillion are small.
Responses
© 2025. Kent A. Clark Center for Global Markets.
10%
10%
0%
5%
15%
49%
10%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
10%
10%
61%
19%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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 Janet Currie |
Princeton | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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They should pay more for more implicit protection.
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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I am open minded about a size cap, but before taking this action, I think more research should be done on unintended consequences.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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Probably better to stiffen regulations.
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Claudia Goldin |
Harvard | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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it wasn't really size that made them dangerous. it was interconnection. derivatives, resolution, and consolidated supervisor > deposit size
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Hard to disagree in principle; we need more information on how to design such rules practically (or at least i need to know more).
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 Robert Hall |
Stanford | Bio/Vote History | ||
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Limiting assets is largely ineffective because banks can take similar risks and earn similar returns using swaps rather than holding assets.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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Very unclear how far to go. Was too big to fail the problem in Canada? In Europe? Expansion triggered by regulatory change the big problem.
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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Banks face the same market incentives, and will make similar investments. Penalizing size does not help the solvency of the banking system.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Many ways to use derivatives and other regulatory loopholes to avoid these penalties. So we could make things less safe. Details matter.
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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Depends on the capital requirements imposed on them.
-see background information here |
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 Edward Lazear |
Stanford | Did Not Answer | Bio/Vote History | |
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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I think my view on this would depend on exactly what steps were being proposed.
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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I think the dangers of "too big to fail" have been exaggerated. Small banks would have to be bailed too in a financial crash.
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Did Not Answer | Bio/Vote History | |
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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 Hyun Song Shin |
Princeton | Bio/Vote History | ||
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Seems right. Like the tax idea at rate that increases above some threshold.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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 Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Raj Chetty |
Harvard | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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Janet Currie |
Princeton | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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The costs, such as "too big to fail" are clear, and changing. The benefits, including easier intermediation of large deals, are non trivial.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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small relative to the costs anyway
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Claudia Goldin |
Harvard | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Robert Hall |
Stanford | Bio/Vote History | ||
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Any returns to scale are likely exhausted at smaller scale. But we should not measure size by assets, but by exposure.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Scope (geographic as well as product) may be the bigger issue. Subsidizing risky investment activities with subsidized deposits problematic
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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If size helps a bank provide significantly better service to customers then the economy enjoys significant benefits.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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US firms are big in all industries and balance sheet size is an imperfect measure. But evidence on scale and scope efficiences is weak.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Presume there are some economies of scale, but favor higher capital requirements on them.
-see background information here |
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Edward Lazear |
Stanford | Did Not Answer | Bio/Vote History | |
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Don't feel very informed on this, but not obvious why a few banks going from $500 bn to $1+ tr would create large aggregate benefits.
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Did Not Answer | Bio/Vote History | |
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Hyun Song Shin |
Princeton | Bio/Vote History | ||
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Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
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