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“Too Big to Fail” Is Too Costly to Continue

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Abstract

Finance is central to the growth and development of the world economy, and a relatively small number of global systemi-cally important financial institutions (G-SIFIs) are central to finance. But this interdependency is dangerous. The failure of one or more G-SIFIs could disrupt financial markets and put the world economy into a tailspin. Even if such a decline could be arrested, it may take many years before output again reaches its pre-crisis level and many more before it attains levels consistent with the pre-crisis trend of growth rates. Thus, crises can be quite costly, particularly if they permanently scar the economy (see Figure 1.1).1

Keywords

Monetary Policy Central Bank Credit Rating Great Recession Government Debt 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© Thomas F. Huertas 2014

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