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The 1970s Origins of Too Big to Fail

Author

Listed:
  • George Nurisso
  • Edward Simpson Prescott

Abstract

In 1972, bank regulators bailed out the $1.2 billion Bank of the Commonwealth partly because they viewed it as ?too big to fail.? We describe this bailout and subsequent ones through that of Continental Illinois in 1984 and use the descriptions to draw lessons about too-big-to-fail policy. We argue that some of the same issues that motivated bailouts during this earlier period, particularly worries about banking concentration, are relevant today.

Suggested Citation

  • George Nurisso & Edward Simpson Prescott, 2017. "The 1970s Origins of Too Big to Fail," Economic Commentary, Federal Reserve Bank of Cleveland, issue October.
    • Handle: RePEc:fip:fedcec:00080
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    Cited by:

    1. Detzer, Daniel, 2019. "Financialization made in Germany: A review," IPE Working Papers 122/2019, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

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