too big to fail

English

Adjective

too big to fail

1. (finance, economics, politics) Deemed too important to the economy or polity to be allowed to “fail”, that is to be liquidated or to go bankrupt.

   Synonym: TBTF

   • 1912, Fabian Society, Fabian Tract No. 164, "Gold and State Banking: A Study in the Economics of Monopoly"

     The fact, which surely everybody knows and hardly anybody ventures to state, is that the stability of our great banks--and all our banking system which now matters a tittle consists of great banks--is based not on the supply of gold in their vaults, nor on the reserve in the Bank of England, but on the fact that they are too big to fail, too big commercially and far too big politically. If Lloyds, or the London County, or the National Provincial stopped payment, the consequences would far exceed a San Francisco earthquake, a Chicago fire, or any other catastrophe within the memory of man.

   • 2004, Terry Pratchett, Going Postal:

     The Trunk's too big to fail. Too many investors. He'll get more money, keep the system going this side of disaster, then let it collapse.

   • 2008, Ben S. Bernanke, Testimony on regulatory restructuring before the Committee on Financial Services, U.S. House of Representatives on July 10, 2008

     In these efforts, we aim not only to make the financial system better able to withstand future shocks but also to mitigate moral hazard and the problem of "too big to fail," by reducing the range of circumstances in which systemic stability concerns might prompt government intervention.

   • 2011, William Leiss, The Doom Loop in the Financial Sector: And Other Black Holes of Risk, University of Ottawa Press, →ISBN, page 126:

     This is the only remedy that would permit an escape from the “doom loop” described by Piergiorgio Alessandri and Andrew Haldane (2009), whereby, when financial institutions are seen as “too big to fail,” governments have no option but to bail them out with public money, no matter how many times they claim they will not do so.

   • 2018 October 7, Shane Hickey, “Shadow banks, trade wars, Trump … clouds gather over the IMF’s paradise”, in The Observer‎^[1]:

     The rise of unregulated “shadow banks” and the lack of restrictions on insurers and asset managers were pinpointed as concerns – as was the growth of global banks to a scale larger than 2008 and the fear that they are again “too big to fail”.

   • 2023 March 22, Philip Oltermann, quoting Cédric Wermuth, “Switzerland’s national pride dealt heavy blow by the merger of its banking titans”, in The Guardian‎^[2], →ISSN:

     “The risk that this monster bank can use its monopoly standing to blackmail the government and dictate its own regulation is enormous,” Wermuth said. “It’s absolutely too big to fail.”

Further reading

• too big to fail on Wikipedia.Wikipedia