too big to fail

  

Definition

Idea that certain businesses are so important to the nation, that it would be disastrous if they were allowed to fail. This term is often applied to some of the nation's largest banks, because if these banks were to fail, it could cause serious problems for the economy. By declaring a company too big to fail, however, it means that the government might be tempted to step in if this company gets into a bad situation, either due to problems within the company or problems from outside the company. While government bailouts or intervention might help the company survive, some opponents think that this is counterproductive, and simply helping a company that maybe should be allowed to fail. This concept was integral to the financial crisis of the late 2000s.

Use too big to fail in a sentence

  • During the economic crisis of the 2008, the US government intervened in the fate of companies such as AIG because such a company was too big to fail and if it did the outcome would be unprecedented and cataclysmic.

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  • The "Occupy Wall Street" movement was considered too big to fail, because it represented such a large swath of the American population.

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  • Theodore Roosevelt used the phrase Too Big To Fail to promote big businesses, but in the modern world that is an irrelevant saying, as any company can fail at any time.

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