Really, more than was ever earned in the history of banking? To me that would seem to imply that at this point every banking institution would be bankrupt.
Shouldn't a guy who chides people for sloppy thinking be rather more careful, or am I just missing something and being stoopid?
You have to remember, banks take a tiny fraction of a ton of money. They make the promise, give me a buck today, and i'll give you back $1.02 in a year, with no risk. You created all the value in the initial dollar, they just make the 2 cents. So, when a bank doesn't even give you your dollar back, they wipe out a ton of value.
Actually, all you would need is some subset of banking institutions to go _spectacularly_ bankrupt, and end up owing, in aggregate, more than the others have ever made. Of course, the institutions would have to be big to make that happen. Say, the size of Bear Stearns, Lehman brothers, or Merrill Lynch...
I'm not a domain expert (I'm sure we have a number of them around), but it sounds at least within the realm of plausibility.
I just want to say something about the banking crisis though, to get it off my chest - it will happen again, sooner or later. Even though new financial regulation will likely be introduced to prevent a crisis like this from happening again, over time institutions will develop ever more complex instruments and trading rooms to find a way around them - as they have done so historically - and make turkeys out of all of us, once again. The fundamental problem is the lack of political will to maintain oversight and keep regulation up-to-date.. politicians (and the rest of us) only really take notice when something goes badly wrong. How do we solve this problem?