But if risk-taking activity goes on long enough, then sufficient leverage may well accumulate somewhere to make the ensuing deleveraging generally disruptive, placing policy-makers once again in a very awkward situation. Too big to fail And that brings us to the most difficult of all the issues, namely that of the too-big-to-fail institution.
Here the term “big” might mean a large balance sheet, or refer to interconnectedness or complexity. Or all three of the above. In some countries, the debate on this issue is now quite active.