8  Shortcomings in the TBTF regulations before the crisis Ladies and gentlemen, the global financial crisis has clearly demonstrated that, not least for Switzerland, the ‘too big to fail’ issue is real and the costs and risks for society as a whole are too high for this state of affairs to be simply accepted. 5 6 7 8  Cf. Horton et al. (2009). Cf. Swiss National Bank (2008). Cf. Swiss Federal Council (2011). Share of balance sheet total relative to Swiss and US GDP respectively at end-2017: ZKB 25%; Raiffeisen 34%; UBS 138%; Credit Suisse 112%; JPMorgan Chase 13%; Bank of America 12%. Page 5/14  a) ‘Too big to fail’ issue: recognised but insufficiently addressed by regulation ... Looking back today, it is clear that this issue was underestimated before the crisis – both in general and by the regulators. For instance, before the crisis, neither the international recommendations on banking regulation nor the Swiss regulatory provisions contained anything that explicitly addressed the systemic importance of individual banks and the associated risks. And this despite the fact that people were aware of the issue before the crisis – both in Switzerland and elsewhere. 9 The term ‘too big to fail’ itself already featured in political debate during the 1980s in the US, in the context of difficulties experienced at a number of financial institutions.
6 See Donald Kohn and Brian Sack, Monetary Policy during the Financial Crisis, preliminary discussion draft  presented at the Hutchins Center on Fiscal and Monetary Policy at Brookings and Yale School of Management Program on Financial Stability event, Responding to the Global Financial Crisis: What We Did and Why We Did It, Washington, D.C., September 11–12, 2018. 7 Possible sources to which this lament has been attributed are catalogued here, although its actual provenance  is not known. 8 As part of our analysis of what went wrong in our forecasting before the Great Recession, researchers at the  Federal Reserve and European Central Bank jointly looked at various methods of more directly including highfrequency fluctuations in our forecasting models. The results from this research are reported in Luci Alessi, Eric Ghysels, Luca Onorante, Richard Peach, and Simon Potter, Central Bank Macroeconomic Forecasting during the Global Financial Crisis: The European Central Bank and Federal Reserve Bank of New York Experiences, Federal Reserve Bank of New York Staff Reports, number 680, July 2014. 9 See survey questions and results to the Survey of Primary Dealers and Survey of Markets Participants, Federal  Reserve Bank of New York. 10 Of course, the NBER didn’t actually declare the start of the recession until late November 2008, nearly a year  after it officially began. 11 Estrella and Mishkin’s original paper, updates, related research, and current recession probabilities implied by  the term spread are available on the New York Fed’s Research website.