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Bringing To Heel The Elephants In The Economy: The Case For Ending “Too Big To Fail”, Ann Graham

The University of New Hampshire Law Review

[Excerpt] “Financial institutions labeled “Too Big To Fail” (TBTF) are those whose insolvency could shake the foundations of the U.S. financial system and our economy. The term “too big to fail” became part of our popular vocabulary in the wake of federal bank regulatory intervention to prevent the failure of Continental Illinois National Bank in 1984. After the banking and savings-and-loan crisis of the 1980s, the pros and cons of the TBTF policy were extensively debated. Despite Congressional efforts to limit application of TBTF, the doctrine has returned with renewed vigor during the current crisis. Responding on an ad hoc …