Since the 2008 financial crisis, regulators have crafted a complex blueprint to mitigate banks’ interconnectedness, high-risk business activities and size. Yet the circumstances responsible for the 1984 failure of Continental Illinois National Bank and Trust Company suggest that the rules in place today may not be adequate to prevent another systemic financial crisis, according to Atlanta Fed executive director Larry D. Wall. getAbstract recommends his relevant, solidly researched and accessible article on the issue of too big to fail to policy makers and bankers.
In this summary, you will learn
- Why the risk of too-big-to-fail banks is an ongoing public policy issue,
- Why a viable assessment of post-2008 banking regulation includes its effectiveness in preventing past institutional bailouts and
- How a major bank failure could cause another financial system crash.
About the Author
Larry D. Wall is an executive director at the Federal Reserve Bank of Atlanta.