Too-Big-To-Fail

Too-Big-To-Fail

Describing a concept or policy that certain companies are so systematically important to an economy that the government must intervene if they are in danger of bankruptcy or other failure. The idea behind a too-big-to-fail policy is that these companies do business with too many other companies, and their failure will cause a cascade effect adversely impacting the economy on a grand scale. Supporters of too-big-to-fail policies argue that they maintain economic stability, while critics allege that they encourage unnecessary risk taking.