A remarkable fact about post-crisis attempts to end the “too-big-to-fail” status of systemically important financial institutions (SIFIs) is how much these efforts depend on the creation of new classes of “loss-absorbing” creditors. If there is one thing SIFIs have never lacked, it is an...

Financial crises can wreak havoc on an economy, but they can also generate significant costs that are not directly captured by economic variables: psychic harms to those who lose their homes or jobs, and a deterioration in public faith in key societal institutions. Because of this, we should...