This is the Cato Daily Podcast for Thursday, October 29, 2009.

I'm Caleb Brown.

Our institutions that are too big to fail simply too big and what could prevent them from

getting that big except a withdrawal of any kind of government bailout guarantee.

It is removing that guarantee even feasible.

Jerry Odriskill, a senior fellow at the Cato Institute Institute was a vice president at both the Federal Reserve Bank of Dallas and Citigroup.

We spoke yesterday.

If an institution is so large that the federal government and administration has to give it taxpayer support.

I maintain this means it's too big because an institution should not be able to fall back on the taxpayer.

And if it's too big because it's too, the phrase is used

systemically important, it can affect too many other institutions

if it fails, then it should not have gotten to be that big.

Now the fact of the matter is that institutions that are growing very large and very complex

and fall into this category of about 20

financial firms that are deemed to be too big to fail, they grow to that size

precisely in order to be able to draw on the support of the government which is

ultimately the taxpayer.

And so we have to look at the reasons and the policies that lead to that.

But as I think about banks and how the Fed and Treasury and others acted in the wake of the financial crisis, a lot of the problem

has had to do with the character of assets held by institutions, even those that were not as large at these giants, these giants.

It had more to do with, like I said, the character of the assets rather than the systemic importance of the institution itself, right?

Yes, they go together though.

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