The last financial crisis catapulted the U.S. economy into the worse recession since the Great Depression. Since then, much time and discourse has been dedicated to blaming the big banks for engaging in risky business.

Michael Pettis, finance professor at Peking University in Beijing and senior associate at the Carnegie Endowment for International Peace, recently wrote in the Financial Times that reckless banking is actually good for economic growth.

He writes:

"No growing economy has sustained a stable financial system. In fact, long-term wealth creation accrues most to societies in which the financial system most willingly funds risk-taking entrepreneurs. But the more a financial system is willing to finance risky new ventures, the greater the likelihood of banking instability. That, perhaps, is why the system that delivered the subprime crisis also funded the computing and internet revolutions."

The Daily Ticker's Lauren Lyster caught up with Pettis at this year's 2013 Wine Country Conference in support of Les Turner ALS Foundation.

"A good financial system is a system that does a good job of allocating the savings of the country to producers that are most likely to increase economic value, like entrepreneurs," he says. And that endeavor, he argues, is necessarily a very risky business.

He goes on to explain that there is no historical evidence that shows that countries with safe banking systems grow faster than those that are less stable.

"The period of most rapid growth in American history was also a period in which our banking system was frankly scandalous," he adds. "It is not very clear to me that stability is the objective of banking."

That said, he does believe that America's financial institutions are too big to fail and should be broken up.

"The problem with having such huge financial institutions is that we are really held hostage to them," he explains. "I think the U.S. would be much healthier if we had a lot more banks, a lot smaller banks, more divisions between different types of financial sectors so that we could tolerate periodic instability and periodic crises without threatening to bring the whole system down."

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