I’d like to propose some structure to the policy debate around the Too Big to Fail (TBTF) concept. This arises mostly from my frustration with both the debate among policymakers and the press coverage of that debate. Many people seem to be talking past each other.
The following explanation will be too elementary for some, but I find I often benefit from getting my problem definition straight before trying to debate solutions. My thoughts on this topic continue to evolve, so I invite readers with expertise to help me improve the following. I’m thinking of this both in the context of the current legislative debate, as well as to help my work as a member of the Financial Crisis Inquiry Commission.
Too Big to Fail is catchy but imprecise. I’d like to incrementally build a more complex but more precise problem definition.
