Banking is a middleman activity. Since the development of dependable mail service in the 1700s and even more so since the invention of the telegraph and telephone the cost of information has been going down. Middlemen use the costs of gaining and processing information to make a profit. So banks as middlemen should be in the process of being squeezed out. Pretty much everybody knows the above facts but it still came as a shock to me in reading up on the meltdowns of the past 50-60 years to run across the following facts: right after WWII (according to James Dimon as quoted in "Last Man Standing") that banks accounted for 60% of banking activity but only 20% now. The securitization of debt which began in the 70s is an effect of profit margin squeezes. Insurance companies, trust funds, foundations and newer ideas such as hedge funds and money markets have been taking market share from the banks at a steady 1.2% a year growth rate for probably a couple of centuries. Federal financial regulation has focused on this steadily shrinking industry since the 1790s. What are the dimensions of this problem?