Auburn University; Milken Institute
Chapman University; University West
December 17, 2015
Abstract:
Too big to fail traditionally refers to a bank that is perceived to generate unacceptable risk to the banking system and indirectly to the economy as a whole if it were to default and unable to fulfill its obligations. Such a bank generally has substantial liabilities to other banks through the payment system and other financial links, which can be sources of contagion if a bank fails. The main objectives in this paper are to identify the different dimensions of too big to fail and evaluate various proposed reforms for dealing with this problem. In addition, we document the various dimensions …
Read the full article at: http://www.valuewalk.com/2016/01/too-big-to-fail-and-too-big-to-save-dilemmas-for-banking-reform/