There were some exceptions: in cases such as Bear Stearns a private sector “white knight” was found3; in the case of some medium sized banks the FDIC resolution regime could be implemented (eg Washington Mutual); in the case of the Icelandic banks losses were imposed on both domestic and foreign creditors; and of course Lehman Brothers was allowed to fail under normal commercial process.
While there were glimpses of what could be achieved through effective failure resolution mechanisms, the widespread fallout from the Lehman collapse tended to reinforce the “too big to fail” consensus. Probably the most costly case of bank bail-outs occurred in Ireland where the government is estimated to have spent close to 30% of GDP on bank recapitalisations between 2008 and 2010.