wefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwef

wefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwef

wefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwef

wefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwef

wefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwef

wefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwefwef

wefgu The policy ‘too big to fail’ refers to the idea that a bank has become so large that its failure could cause a disastrous effect to the rest of the economy, and so the government will provide assistance, in the form of perhaps a bailout/oversee a merger, to prevent this from happening. This is to protect the creditors and allow the bank to continue operating. If a bank does fail then this could cause a domino effect throughout the economy, i.e. bigger companies often purchase supplies through a smaller company who rely on the bank for a large portion of its income, the bank’s failure could then cause them to shutdown, meaning unemployment. So what the regulatory bodies
Is this essay helpful? Join OPPapers to read more and access more than 550,000 just like it!

get better grades need to decide is what is the more economically viable solution in the long run. The Governor of the Bank of England recently stated that 'if a bank is too big to fail - it is too big.' From 1929 – 1933 the US banking system failed and this caused one of the greatest economic recessions in history. During this period banks were allowed to fail as there was no regulatory body (Federal Deposit Insurance Corporation), no protection of depositors, and no real mechanism for an orderly dissolution of the existing management and transfer of what was valuable to a new, stronger bank.
Friedman, Heller (1969 pp. 79-80) states that "We did learn something from the Great Depression... We learned that you ought