It's one thing for taxpayers and angry everymen to complain about giving life-support to "too big to fail" banks, but when the chairman of bank giant J.P. Morgan Chase attacks the policy, it's time to sit up and take notice. Though some Wall Street firms claim they're performing a divine service, Jamie Dimon forcefully argues that his big bank should be allowed to fail if necessary. Of course, he has an interest in warding off lawmakers' threats to cut big banks down to size prematurely:

If some unforeseen circumstance should put this firm at risk of collapse, I believe we should be allowed to fail. As Treasury Secretary Timothy Geithner recently put it, "No financial system can operate efficiently if financial institutions and investors assume that government will protect them from the consequences of failure." The term "too big to fail" must be excised from our vocabulary.

But ending the era of "too big to fail" does not mean that we must somehow cap the size of financial-services firms. Scale can create value for shareholders ... As we have seen clearly over the last several years, financial institutions, including those not considered "too big," can pose serious risks for our markets because of their interconnectivity. A cap on the size of an institution will not prevent that risk. Properly structured resolution authority, however, can help halt the spread of one company's failure to another and to the broader economy ...

Global economic growth requires the services of big financial firms. It also requires that big financial firms be allowed to fail.

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Heather Horn