Banks are unprofitable because they make too many bad loans and their good loans have little profit in them. They also have the dubious advantage of an awful set of accounting conventions— a rolling loan gathers no loss —that permits them to mask their mistakes and hold assets without marking their value to market. Spreads are narrow, costs are high and there is too much reliance on insured deposits, with the accompanying incentive to take risks with someone else's money.

Speech on Banking Systems for the New York Times and Glass Steagall.". (1990)