“Too big to fail”

The latest RGE Monitor’s newsletter contains the following text:

Edward Harrison describes why Swiss bank UBS is too big to fail, but also too big to bail for tiny Switzerland. He provides concurrence to this feeling from Swiss banking expert Manuel Ammann, who in the German language press recently gave his opinions on how UBS should be structured as a result of the crisis.

This pretty much summarizes where we are with the globalization progress. There are multinational companies that are “too big to fail”. But not only that. They are now too big to save by individual countries. I assume the current coordinated multinational response to the economic crisis might bring the new way of dealing with these gigantic corporations. They have overgrown their native countries and markets and are simply too big a burden for any single individual country. And, since there are entities that are now larger than the state, the significance of states may be waning rapidly. In Europe this is more or less obvious with the advancement of the European Union. Individual countries are losing their power. I actually do hope this happens even faster and European Constitution gets up to speed with the EU development and enlargement.

Well, since these entities that are now more important than states are companies – entities in the economic sphere – this shows that this is the age of finance and economy. Whether this current financial crisis, originating in and affecting primarily the financial circles, will cause this era to end? I guess we’ll know in the next 6-12 months.