If the five largest banks—JP Morgan, Bank of
America, Citigroup, Goldman Sachs, and Morgan Stanley—are too big to fail and
yet substandard operationally on account of their respective complexities
(e.g., investment banking added to commercial banking), might it be that the
market-based decisions of investors will relegate the giants, which by the way
had price-to-book value ratios of between .37 to .77 in May 2012, thereby
solving the problem of systemic risk?
The full essay is at "Reducing Systemic Risk: The Market or Government?"