Too big to fail: origins, consequences, and outlook
Robert L. Hetzel
Additional contact information
Robert L. Hetzel: Federal Reserve Bank of Richmond
Economic Review, 1991, issue nov, 3-15
The policy of too big to fail arose in part from pressures created by the lack of satisfactory bankruptcy arrangements for banks. It prevented market forces from closing banks and protected all uninsured depositors of large banks from loss in the event of failure. The consequent risk-taking behavior of banks produced the systemic instability in banking that the policy was designed to prevent. It is debatable how the Deposit Insurance Reform Act of 1991 will affect the timing of bank closures, the risk-taking behavior of banks, and the contraction of the banking industry.
Keywords: Bank; failures (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed
Downloads: (external link)
https://fraser.stlouisfed.org/files/docs/publicati ... ev_frbrich199111.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fip:fedrer:y:1991:i:nov:p:3-15:n:v.77no.6
Ordering information: This journal article can be ordered from
Access Statistics for this article
More articles in Economic Review from Federal Reserve Bank of Richmond Contact information at EDIRC.
Bibliographic data for series maintained by Christian Pascasio ().