A simple question: How can one compete with institutions (namely, large banks) or develope a competitive platform against them when they are, or may be, deemed "to big to fail", thereby invoking an implicit guarantee from the Federal Government to back its obligations?
How can regional broker-dealers compete with the same problem?
How can independent money-market funds do the same?
A simple answer: they cannot.
The actions of the past month have created massive barriers to entry for all would-be institutions waiting in line to be knighted as "too big to fail" (or "systemically essential" or whatever new fancy words the Fed and their court academics attach to them) by the new Kings of Capital.
We need a Federalist 10 for the new Global Financial Architecture, and America's role in same.