too big to fail

too big to fail
The idea that certain banks will always be supported, because their failure would have an unacceptable effect on the stability of the national or international financial system. If such a bank should get into trouble, it is argued, the central bank would be sure to bail it out. It is further contended that this will make such a bank more willing to take risks. The counterargument is that even if it received aid, there might still be serious consequences for the managers and shareholders of the bank. In any case, the theory only applies to the largest financial institutions. For example, in 1995 the London-based merchant bank Barings plc was allowed to fail after sustaining major losses through irregular trading on the Singapore derivatives market, since the Bank of England could identify no systemic risk resulting from its failure.

Big dictionary of business and management. 2014.

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  • Too Big to Fail — (deutsch: Zu groß, um in Konkurs zu gehen ) ist eine Finanzdoktrin und ein ökonomisches Schlagwort und beschreibt die Vorstellung, dass Unternehmen, aber auch andere Institutionen wie etwa Staaten oder Städte, ab einer bestimmten Größe allein… …   Deutsch Wikipedia

  • Too big to fail — (выражение) (англ.) разговорный термин, приписываемый экономисту Хайману Мински, обозначающий финансовые учреждения, настолько большие и имеющие такое количество экономических связей, что их банкротство будет иметь катастрофические… …   Википедия

  • too big to fail — BANKING, FINANCE ► describing a bank that is so important to the economy of a country that the government will give it public money to prevent it from failing. This happened with many big banks between 2008 2009. : »UK taxpayers funded banks… …   Financial and business terms

  • too big to fail — The concept that some financial institutions are so large that the federal government cannot allow them to fall into bankruptcy, or fail, because to do so would have a devastating effect on the nation s economy. Category: Business Cash Flow… …   Law dictionary

  • Too big to fail —  Ne doit pas être confondu avec Too Big To Fail : débâcle à Wall Street. « Too big to fail » (« trop gros pour tomber ») est un concept économique qui décrit la situation d une banque ou toute autre institution financière …   Wikipédia en Français

  • Too Big To Fail — The idea that a business has become so large and ingrained in the economy that a government will provide assistance to prevent its failure. Too big to fail describes the belief that if an enormous company fails, it will have a disastrous ripple… …   Investment dictionary

  • Too Big to Fail policy — The Too Big to Fail policy is the idea that in banking regulation the largest and most powerful banks are too big to (let) fail. This can either mean that it might encourage recklessness since the government would pick up the pieces in the event… …   Wikipedia

  • Too Big To Fail : débâcle à Wall Street —  Ne doit pas être confondu avec Too big to fail. Too Big To Fail est un film de Curtis Hanson. Portail du cinéma américain …   Wikipédia en Français

  • too big to fail — adjective Pertaining to an enterprise deemed too important to the economy or polity to be allowed to “fail”, that is to be liquidated or to go bankrupt …   Wiktionary

  • big — UK US /bɪg/ adjective INFORMAL ● too big to fail Cf. too big to fail …   Financial and business terms

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