Should banks be treated as utilities?  Matt Levine comments:   “A lot of bankers think this is bad (Jamie Dimon: “There is nothing about banking that remotely resembles a utility”), while a lot of regulators and bank critics think it is good (Neel Kashkari: “Turn large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail”). But what you see less of — not none — is calls for banks to be true utilities, meaning not only that they’re safe and boring and that their returns are capped, but also that their returns are more or less guaranteed. After all, the phrase “competitive utilities” is a bit of a paradox; the reason your gas company’s prices are capped is that it’s the only gas company in town, and if the rates weren’t regulated it could charge as much as it wanted.

Certainly a bank’s expectation that it can earn 25% on money held leads to Libor and other high risk and even illegal operations.