Not too big to fail: Has US crossed bank resolution Rubicon?

Not too big to fail?


If a big US bank suffered life-ending losses tomorrow, it would be a catastrophe for holders of its debt and equity, but no-one else – there would be no public bail-out, and no real threat to the health of its peers. That view has been gradually filtering into market prices over the past year (see box, The end of the TBTF funding subsidy), and some of the industry’s leading lights are now saying the same thing publicly: in the US at least, banks are no longer too big to fail.

“I believe we have

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