What Makes a Bank Too Big to Fail?

The first thing worth saying here is that too big to fail (TBTF) has nothing to do with counterparty risk or credit default swaps or other such arcana of this particular financial crisis. Instead, it's all about the sheer size of a bank's balance sheet -- its assets and liabilities. And when a balance sheet gets up into the hundreds of billions of dollars, or even into the trillions of dollars, you get big problems on both sides when that bank runs into ... Full Story »