Jamie Dimon’s defense of “big banks” in his shareholder letter seems to ignore the experience of the past two years. Big banks are not “inherently risky”, but the larger they are, the larger the share of deposits and capital they put at risk. A mistake on risk assessment or a failure to diversify can indeed pose systemic risk if the bank is large. The risk is even higher if the bank’s assets are complex as we have learned. Mr. Dimon admitted in Congressional testimony that his risk managers (presumably the best in the business) never thought to “stress test” the balance sheet for a decline in house prices in spite of the obviously overdone run-up in prices and supply. Such a mistake at a smaller bank poses less risk. The larger the bank, the larger the systemic risk. Big banks may be better providers of financial services to a few global institutions as Dimon argues, but enough better for the economy to bear the risk? Today’s “big banks” are more than large enough to accommodate the largest global institutions and still diversify their assets. And, syndication is always available, a good way to diversify risk and insure a broader perspective on the risk posed by a “big deal”. To date, there is little evidence that “scale” of the magnitude of a JPMorgan or Citi provides cost economies, but complexity certainly is increased and complexity is more difficult to manage, raising the likelihood of an oversight of growing risk in some obscure corner of the business. Mr. Dimon wants to grow the bank and use more leverage in order to increase his share price. However, the economy should not be put at higher risk to help him out.