Rationale for Increasing Capital Reserves of Big Banks

This was just a good blog post in general, but I thought this was a highlight:

The rationale for the capital increase is that in recent years the financial sector imposed massive losses on the rest of society by the mismanagement of credit. If the big banks have a machine that provides supernormal returns to employees and creditors while causing frequent losses to taxpayers (through the fiscal costs, measured in terms of the increase in net government debt as a result of the recession), savers (because interest rates are cut to zero by the Federal Reserve’s policy response), and their own shareholders in many instances, then reducing the voracity of this machine is for the general good.

From: NYTimes Economix blog