A financial institution that had become so large and so interconnected that its failure would have been such a disaster for the wider economy that failure had to be prevented, even if it required a financial bailout is referred to as _____
A) a troubled-asset institution
B) a failed intermediary
C) a holding company
D) too big to fail
E) too big to rescue

Question

Quizplus · Accepted Answer

The term "too big to fail" refers to a financial institution that has become so large and interconnected that its failure would have catastrophic consequences for the wider economy, and therefore, it must be prevented from failing, even if it requires a financial bailout. The other options (A, B, C, and E) do not capture the specific concept of a financial institution being deemed too big to fail.

A Financial Institution That Had Become So Large and So