The Basics of 'Too Big to Fail'
23 Pages Posted: 6 Mar 2014
Date Written: March 2014
This essay lays out the basics of the “too-big-to-fail” (TBTF) phenomenon: What it means; why it is a problem; the central role that TBTF financial institutions played in the financial crisis of 2008; and why better prudential regulation than was present prior to 2008 is needed for the future.
Keywords: Too big to fail (TBTF); prudential regulation; capital, leverage; liquidity; runs
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