Remember during the last deregulation cycle. When the Savings & Loan
and Bank industries were "deregulated" one open question was: are
there banks considered too big to fail. The problem with that doctrine
is it warps management's risk analysis. Instead of appropriate investments,
management makes excessively risky decisions in an attempt to achieve
short-term returns and maximize shareholder value.
Is PG&E too big to fail?
Remember during the last deregulation cycle. When the Savings & Loan
and Bank industries were "deregulated" one open question was: are
there banks considered too big to fail. The problem with that doctrine
is it warps management's risk analysis. Instead of appropriate investments,
management makes excessively risky decisions in an attempt to achieve
short-term returns and maximize shareholder value.
This is the whole reason behind the federal reserve. To provide a
kinda of safety net in case banks ran short on ready cash.
Is PG&E too big to fail?
I think this is something that has to be considered. The state will
certainly not allow the customers of either PG&E or southern cal
edison to be without power for a long period of time. Too much public
safety depends on it. So if the companies fold, the state will have no
choice but to take control of the company.