Too-big-too-fail financial definition of too-big-too-fail
Government practices that protect large banking organizations from the normal discipline of the marketplace because of concerns that such institutions are so important to markets and their positions so intertwined with those of other banks that their failure would be unaccrptably disruptive, financially and economically.
References in periodicals archive
It is important to understand that, even in a circumstance in which the too-big-too-fail
doctrine is invoked, the stockholders, bondholders, and senior managers of the insolvent bank lose.
By holding the too-big-too-fail
institutions accountable and creating special accommodations and provisions for community banks, the law creates an important precedent, which recognizes that Wall Street megabanks require significantly more regulatory checks and supervision than Main Street community banks.