> There is really no such thing as too big to fail.
Yes, actually there is. Too big to fail means that when an institution fails, its default will cause a cascade failure of other institutions relying on it -- and still other institutions relying on those -- including otherwise healthy ones whose only mistake was being integrated with the world economy.
This can ripple through the whole economy and work in tandem with the Paradox of Deleveraging to effectively cause a GDP death spiral. (See also: Great Depression.)
Yes, actually there is. Too big to fail means that when an institution fails, its default will cause a cascade failure of other institutions relying on it -- and still other institutions relying on those -- including otherwise healthy ones whose only mistake was being integrated with the world economy.
This can ripple through the whole economy and work in tandem with the Paradox of Deleveraging to effectively cause a GDP death spiral. (See also: Great Depression.)