In the years preceding the 2008 financial crisis, banks across the globe were encouraged to grow larger, thereby increasing their share prices. The flurry of merger and acquisition activity, exemplified by the RBS-led purchase of ABN Amro before the crisis, and Bank of America's acquisition of Merrill Lynch after, demonstrates just how determined banking bosses were to scale up in a bid to increase their assets and feel the reward at stock exchanges across the world.
Yet the crash showed precisely what was wrong with big bank conglomerates. Banks that were deemed 'too big to fail' were bailed out by governments concerned that they could bring down the entire financial system. It is not just a question of size, either, but of the riskier investment banking activities carried out by these conglomerate institutions.
