The government's too-big-to-fail policy applies to:
A) certain highly populated states where a bank run impacts a large percent of the total population.
B) large banks whose failure would start a widespread panic in the financial system.
C) large corporate payroll accounts held by some banks where many people would lose their income.
D) banks that have branches in more than two states.

Question

Quizplus · Accepted Answer

The too-big-to-fail policy mainly applies to large banks whose failure would have widespread and catastrophic effects on the financial system. This is because such banks are considered systemically important and interconnected with many other banks and financial institutions. The policy is designed to prevent the potential collapse of these banks, which could trigger a domino effect of failures across the financial sector and harm the broader economy.

The Government's Too-Big-To-Fail Policy Applies To