Too Big to Fail

“Too Big to Fail” (TBTF) is a term used to describe entities that are vital to a nation’s economy, as their failure could lead to severe economic damage. Historically, the US government has intervened to support these critical institutions, often through bailouts, to prevent broader financial crises.

The majority of firms that are considered TBTF are banks and other companies which provide financial services. Some examples are Bank of America, Goldman Sachs, and Morgan Stanley. Other businesses deemed TBTF include General Motors, Chrysler, and AIG.