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

A growing number of policy-makers believe the too-big-to-fail problem is now a thing of the past in the US. But with key details on how the resolution mechanism will work still unclear, some believe that optimism may be misplaced. By Matt Cameron and Joe Rennison


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

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

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