Forced Mergers? Bigger Is Not Necessarily Better!

| 09/16/2008 | 0 Comment(er) |

We read in Monday’s (September 15) Wall Street Journal that the Federal Reserve nudged Merrill Lynch towards a merger: Crisis on Wall Street as Lehman Totters, Merrill Seeks Buyer, AIG Hunts for Cash.

We think it is a mistake, and we’re not certain of the Fed’s goal when its propose such arrangements. Förmodligen, such a nudge is rationalized on the basis ofstabilizingthe financial system, but we’re not so sure that such a rationalization is a justification. It seems like a knee-jerk reaction for the sake oftemporaryLäs resten