nnFor banks, I mean.

Count me in the camp that says that merely breaking up megabanks like Citigroup — or BofA for that matter — is no way to respond to our tough financial issues. Regulators may see appeal in that move as it reduces the too big too fail moral hazard that we are now slamming our heads against each week. But the current troubles are so basic that lending institutions of any kind or size must face them. The value/risk calculation that is the building block of all financial activity must be reworked for every institution. Moving boxes around on an org-chart and sending out new letterhead is precisely the kind of shamanism that got us into this mess in the first place.

Or as Ladenburg Thalmann analyst Richard X. Bove told the AP:

No steel company can sell steel when auto manufacturers aren’t selling cars, and no bank can make big profits when there’s a weakness in the housing and credit markets. … They have to ride out the cycle, minimize the losses, and maximize profits when the cycle returns. You can’t restructure a company to avoid that cycle.

Exactly. But I do think we can say that willy-nilly expansion of a bank’s footprint should never again be mistaken for profitable business activity. Hint-hint Wachovia and BofA.