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dc.contributor.authorLabonte, Marc
dc.date.accessioned2020-11-25T15:10:53Z
dc.date.available2020-11-25T15:10:53Z
dc.date.issued2014-09-19
dc.identifier.other6296579
dc.identifier.urihttps://hdl.handle.net/1813/77638
dc.description.abstractAlthough “too big to fail” (TBTF) has been a perennial policy issue, it was highlighted by the near-collapse of several large financial firms in 2008. Large financial firms that failed or required extraordinary government assistance in the recent crisis included depositories (Citigroup and Washington Mutual), government-sponsored enterprises (Fannie Mae and Freddie Mac), insurance companies (AIG), and investment banks (Bear Stearns and Lehman Brothers).1 In many of these cases, policy makers justified the use of government resources on the grounds that the firms were “systemically important” or “too big to fail.” TBTF is the concept that a firm’s disorderly failure would cause widespread disruptions in financial markets that could not easily be contained. While the government had no explicit policy to rescue TBTF firms, several were rescued on those grounds once the crisis struck. TBTF subsequently became one of the systemic risk issues that policy makers grappled with in the wake of the recent crisis. This report discusses the economic issues raised by TBTF, broad policy options, and policy changes made by the relevant Dodd-Frank provisions. This report also discusses recent legislation addressing the TBTF issue in the 113th Congress. The report ends with an Appendix reviewing the historical experience with TBTF before and during the recent crisis.
dc.language.isoen_US
dc.subject"too big to fail"
dc.subjectTBTF
dc.subjectlegislation
dc.subjectfinancial markets
dc.subjectCongress
dc.titleSystemically Important or “Too Big to Fail” Financial Institutions
dc.typeunassigned
dc.description.legacydownloadsCRS_Systemically_Important_or_Too_Big_to_Fail.pdf: 554 downloads, before Oct. 1, 2020.
local.authorAffiliationLabonte, Marc: Congressional Research Service


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