For example, in March of this year, customers of U.S. banks drew down nearly $ billion on existing lines of credit to cover cash needs during the severe disruption in revenues in the early days of the COVID event—by far the largest monthly increase in history.
Although these uplift factors have recently shrunk to some degree, they unfortunately remain substantial.1 This could be taken as an indicator supporting my claim that the “too-big-to-fail” problem remains unresolved. However, in this regard we need to achieve two objectives at the same time. First, taxpayers should not have to foot the bill for bank failures and, second, systemic disruptions must be avoided.