Increased size of financial institutions resulting from financial consolidation increases the ________ problem,because there are now more large institutions whose failure would expose the financial system to systemic risk.

Question

Quizplus · Accepted Answer

The too-big-to-fail problem refers to the risk posed by large financial institutions whose failure could have a cascading effect on the entire financial system. Financial consolidation leads to the creation of more large institutions, which increases the too-big-to-fail problem.

Increased Size of Financial Institutions Resulting from Financial Consolidation Increases