Simon Johnson: Too big to fail is “too big to exist”

Simon Johnson, a former IMF Chief Economist, who blogs over at the Baseline Scenario, is testifying before Congress today about ‘Too big to fail’ financial institutions.  Below is a video in which he tells Bloomberg his thoughts on the subject before his testimony.

His overall message is that the government needs to deal with the fundamental weakness of banking more head-on right now. Johnson believes the larger institutions will ultimately need to be broken up. He also will testify that the government must prevent poor compensation schemes while the banks are still collecting taxpayer money.