Decoding “Too Big to Manage”: What It May Take to Manage Large, Complex Institutions Successfully

A debate among policy makers, regulators and consumer protection advocates rages today as to whether some banks are just too big. Size has been painted as an inherent sign of risk, villainized as anti-competitive and, worse, abusive of the American consumer. Some have called for breaking up the big banks for years1 and have made it a pillar of their campaigns.2 The Federal Reserve Bank of St. Louis even went so far as to explore the pros and cons of breaking up big banks.3 

No doubt, big banks are huge. The 15 largest banks in the United States held a combined total of $13.4 trillion in assets as of September 30, 2022. JPMorgan Chase Bank NA holds nearly a quarter of that, and Bank of America advertises that it alone serves more than 67 million U.S. consumers and businesses. Scale in banking has important business and operational advantages. It enables larger banks to serve hundreds of millions of customers, handle trillions in daily transactions, and compete in the global economy. Despite criticism of the largest banks, a large portion of American consumers and businesses choose to rely on the five or six biggest banks in the country to satisfy their personal and business banking and financial needs, even with the growth of non-bank competitors. Moreover, nine out of 10 Americans are satisfied with their bank.4 Good or bad, just being big makes a company the target of criticism and additional scrutiny. But do banks at a certain size really become “too big” and are some really “too big to manage”? This article explores how we came to think of banks as “too big,” decodes what is meant by “too big to manage,” and suggests a way forward for bank boards and management to succeed in overseeing their banks’ operations.