How Big a Problem is Too Big to Fail?

Mishkin, Frederic S.

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How Big a Problem is Too Big to Fail?

NBER Working Paper No. w11814

26 Pages Posted: 19 Feb 2006 Last revised: 14 Oct 2022

See all articles by Frederic S. Mishkin

Frederic S. Mishkin

Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER)

Date Written: December 2005

Abstract

This review essay examines whether too-big-to-fail is as serious a problem as Gary Stern and Ron Feldman contend. This essay argues that Stern and Feldman overstate the importance of the too-big-to-fail problem and do not give enough credit to the FDICIA legislation of 1991 for improving bank regulation and supervision. However, this criticism of the Stern and Feldman book does not detract from many of its messages. Even if the too-big-to-fail problem is not as serious as they contend, the policies they outline can make it less likely that a banking crisis will occur even if driven by other factors.

Suggested Citation: Suggested Citation

Mishkin, Frederic S., How Big a Problem is Too Big to Fail? (December 2005). NBER Working Paper No. w11814, Available at SSRN: https://ssrn.com/abstract=875690