The second issue is that the US was missing big money center banks which were able to lend during the crisis in 1987 and 1998. "Back then those banks, who had basically loans which were reserved for bad debts, were still able to lend," said Kaplan.

"Today most these big institutions have broker dealers. When it comes time to lend, many of these broker dealers weren't able to lend, because they have an upward of 30 percent of their balance sheet in securities and trading assets. So they lose capital immediately when the market was down."

He said that the real "soul searching" that has to be done is where the pure commercial banks are in the US that can still lend even in period of distress. Right now "we only have one that I can see. It's called the Federal Reserve. That cannot work!"

William George, former chairman and CEO of Medtronic, agreed with Kaplan, "I think we need powerful banks in the US. If I look at the breakup of AT&T decades ago, it was a big setback for the US competitors in the communications world. We lost a good decade there."

Author of a new best-selling leadership book, Finding Your True North: A Personal Guide, George was selected as one of "The 25 Most Influential Business People of the Last 25 Years" by PBS Nightly News. He is currently Professor of Management Practice at Harvard Business School.

"So I wouldn't favor breaking up the banks, but keeping some mode of regulations," he added.

"What we truly need are standards for capital and leverage, because if you have one competitor in the industry that is highly leveraged and seems to be working, you can over time pull others in," Kaplan said. "I think the world has learned a lesson."

(Xinhua News Agency November 23, 2009)