Too Big To Fail
Concept that some large banks might receive government support to avert systemic crisis.
Detailed Description
Too Big To Fail
What does 'Too Big To Fail' mean?
It refers to financial institutions whose failure would have catastrophic consequences for the economy, prompting government intervention.
When did the concept of TBTF gain prominence?
It gained prominence during the late 20th century, particularly after the 1984 Continental Illinois National Bank failure.
What are some examples of TBTF institutions?
Prominent examples include JPMorgan Chase, Bank of America, Citigroup, and Goldman Sachs.
What regulatory measures were implemented in response to TBTF concerns?
Measures include the Dodd-Frank Act, which established enhanced capital requirements and stress testing for large financial institutions.
What criticisms are associated with the TBTF concept?
Critics argue it creates moral hazard, undermines free-market principles, and diverts attention from broader financial system reforms.