Too-Big-To-Fail

Describing a concept or policy that certain companies are so systematically important to an economy that the government must intervene if they are in danger of bankruptcy or other failure. The idea behind a too-big-to-fail policy is that these companies do business with too many other companies, and their failure will cause a cascade effect adversely impacting the economy on a grand scale. Supporters of too-big-to-fail policies argue that they maintain economic stability, while critics allege that they encourage unnecessary risk taking.

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* Prevent systemic (too-big-to-fail) institutions from failing by bailing them out.

Let's Hear It for the Standard Narrative

When the 2007 global financial downturn started in the US, there were talks about the "too-big-to-fail" banks that made the economy fragile.

Is there a need for a supply cap in Dubai's real estate market?

Treasury Erases 'Too-Big-to-Fail' Label on Prudential

BANKING AND CREDIT NEWS-October 18, 2018--Prudential exits too-big-to-fail list

Prudential exits too-big-to-fail list

M2 EQUITYBITES-October 18, 2018--Prudential exits too-big-to-fail list

Prudential exits too-big-to-fail list

Global Banking News-October 18, 2018--Prudential exits too-big-to-fail list

Prudential exits too-big-to-fail list

The too-big-to-fail problem in banking is the unwillingness of regulators to close a large troubled bank because of a belief that the short-term costs of a bank failure are too high.

The 1970s Origins of Too Big to Fail

Despite its of goal of keeping too-big-to-fail banks in check, many in the financial industry feel that Dodd-Frank missed the mark--failing to slow the proliferation of mega-banks while simultaneously stifling the growth of small- and medium-sized banks.

BANKING ON CHANGE: What Dodd-Frank did--and didn't do--for the financial industry

New York-based MetLife was the only company to challenge the too-big-to-fail status in court, Kandarian noted, and the "victory has preserved our ability to remain on a level playing field with others in the industry."

MetLife GC Ricardo Anzaldua Stepping Down

Also, remedying the "too-big-to-fail" element in reviving the Act, "trying to break up the big banks because the big banks had to get bailed out this last time around -- big and small banks have gotten bailed out before," Ireland continued.

Should Glass-Steagall Come Back? No, AEI Panelists Say

McWatters added that this approach would require a deep resolve to stand the heat from the too-big-to-fail banks.