Large financial institutions provide significant value to the U.S. economy and American investors, business owners, and savers. In the sheer size of credit they can deliver, in the array of products and services they can provide, and their geographic reach, large financial institutions provide many benefits that smaller institutions simply cannot. This unique economic value is particularly important to large, globally active clients and contributes directly to U.S. economic growth and job creation.

Large institutions also are far more diversified in their business mix as compared to smaller institutions, which tend to be engaged in fewer businesses and regions and, therefore, are exposed to greater concentration risk. In this regard, larger institutions are more stable than smaller institutions.

Because large diversified financial institutions provide significant economic value that clients and customers rely on, any attempt to arbitrarily and preemptively break them up could cause large firms to leave the United States — thus taking their economic value, expertise, and jobs along with them.

There are however legitimate concerns about too-big-to fail, but we need to properly diagnose the problem to find the right solution. The problem is not that some institutions are large, it is that there is currently no legal authority to controllably unwind a failing financial conglomerate in the way that the FDIC is currently authorized to do. More effective supervision, coupled with the authority to seize and wind down large firms, is the appropriate remedy for too-big-to-fail — a remedy that will not impede economic growth or quash the benefits large institutions offer to U.S. businesses and workers.

To be a global financial leader, the United States needs institutions of all sizes, business models, and areas of expertise. Being a global financial leader is an enormous strategic advantage for the U.S. economy and American businesses, workers, savers, and investors — an advantage we should work hard to preserve.