Chapter 14: using bankruptcy law to solve too-big-to-fail

The threat to society of institutions that are too big to be allowed to fail should be solved through a predictable legal framework, rather than punitive regulation. David Rowe commends a group of academics working on the details of such a framework


In April 2010, I argued that efforts to eliminate the too-big-to-fail problem had been overly focused on minimising the likelihood rather than the severity of such failures (Risk April 2010, page 73). More restrictive and more complex capital requirements, new liquidity rules and a flood of new and detailed provisions surrounding stress testing and credit procedures are all designed to prevent systemically important financial institutions (Sifis) from imploding. Harsh experience should tell us

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here