Introduction : our message and methods -- What is the problem? -- Why protection is costly -- How pervasive is TBTF? -- Why protect TBTF creditors? -- The growth of TBTF protection -- Testing our thesis : the cases of not too big to fail -- Can the problem be addressed? -- Creating the necessary...

Excerpts from the 2004 book, “Too Big To Fail: The Hazards of Bank Bailouts,” by Gary H. Stern and Ron J. Feldman.

The most persuasive way to convince bank creditors that their bank isn't too big to fail (TBTF) is for policymakers to reduce systemic risk and to communicate those steps to the public.

A proposed bank merger and acquisition (M&A) provides a unique opportunity to address too big to fail concerns—the problem of big banks taking undue risks due to creditors’ perceptions that government policymakers will bail them out to prevent spillovers from bank collapse. Under a...

Excerpts from Too Big to Fail: The Hazards of Bank Bailouts by Stern and Feldman, forthcoming from Brookings Institution Press.

In this essay, we first briefly explain why the government’s response to the 2007–08 financial turmoil, although justified, expanded the safety net and exacerbated the existing too big to fail problem.