Once upon a time, 'too big to fail' was shorthand to villainize big banks. These days, it's a way to say 'your money is safe.'
The notion that some financial institutions are just too large, and distort markets or threaten financial stability.A bank is so interconnected with other institutions that its failure would create panic or broad financial instability.
that made failure less likely by requiring the banks designated as systemically significant to adhere to stricter rules. The fight to break up the banks, and fix "too big," didn't quite materialize.part of the reason that TBTF is viewed differently now, says Michael Madowitz, director of macroeconomic policy at the Washington Center for Equitable Growth, a progressive think tank.
While SVB and Signature Bank were allowed to fail , the FDIC still swooped in and made uninsured depositors whole. The idea was to stave off systemic risk.Big banks might be a "safe port" in a crisis like the current one, concedes Dennis Kelleher, the CEO of Better Markets, a nonprofit that advocates for tighter regulation. But they "still pose an existential threat to the country's financial system, economy and people.
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