US Too Scared to Take On Monster Banks: Stiglitz

it's 'outrageous' bonuses aren't being curtailed, says economist
By Mat Probasco,  Newser Staff
Posted Sep 14, 2009 3:43 AM CDT
US Too Scared to Take On Monster Banks: Stiglitz
Columbia University Professor Joseph Stiglitz, Professor participates in a session at the World Economic Forum in Davos, Switzerland, early this year.   (AP Photo/Keystone/Alessandro Della Bella)

Underlying financial problems posed by ever-growing monster banks are worse now than before the economic crisis, but the Obama administration is reluctant to take them on, warns a Nobel Prize-winning economist. The so-called "too-big-to-fail banks" have become even bigger, and their troubles will further threaten the economy, Columbia University Professor Joseph Stiglitz tells Bloomberg.

“It’s an outrage" bonuses aren't more closely linked to performance "especially in the US where we poured so much money into the banks,” Stiglitz says. “The administration seems very reluctant to do what is necessary." Obama's plan is to subject “systemically important” banks to stricter oversight, but isn't expected to demand they shrink or simplify their structure, Stiglitz notes. (More Joseph Stiglitz stories.)

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