So, if the end goal of Wall Street is to spread risk around—to avoid the “too big to fail” problem that just means socialized capitalism—then why is it a positive thing for bank failures or near failures to inspire M&A activity? Doesn’t more M&A activity mean fewer players, higher barriers to entry, and, worst of all, concentration of risk in fewer areas?

To quote John quoting Friedrich Hayek: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

[Perhaps I am biased by being in an industry with very few players.]