For globally systemically important banks (G-SIBs) with U.S. headquarters, we find large post-Lehman reductions in market-implied probabilities of government bailout, along with big increases in debt financing costs for these banks after controlling for insolvency risk. The data are consistent...

The goal of any financial regulatory system should be to enable well-functioning markets, which includes reducing the impact and frequency of financial institution failures that cause systemic risk. Any regulatory structure, however, inevitably involves tradeoffs. A policy that effectively...

The twin financial and sovereign debt crisis occurred during the last decade fostered the already existent debate on the so called too-big-to-fail financial institutions (“TBTF”) issue. The present essay will try to critically discuss the effectivity of the main measures adopted insofar in...

This paper, written for a conference at the Fordham University Law School, examines various facets of the “too big to fail” debate. It notes that in the current context, “too big to fail” may imply systemic risks from large financial institution size, compensating economies of scale,...

This Essay explores the constitutional implications of a threatened default by a large state. Much like the huge financial institutions that became distressed in 2008, a large state might well be deemed too big to fail. If that kind of state seeks a federal bailout, it would hold most of the...

Usually associated with large bank failures, the phrase too big to fail, which is a particular form of government bailout, actually applies to a wide range of industries, as this volume makes clear. Examples range from Chrysler to Lockheed Aircraft and from New York City to Penn Central...