The potential failure of a large bank presents vexing questions for policymakers. It poses significant risks to other financial institutions, to the financial system as a whole, and possibly to the economic and social order. Because of such fears, policymakers in many countries - developed and less developed, democratic and autocratic - respond by protecting bank creditors from all or some of the losses they otherwise would face. Failing banks are labeled 'too big to fail' (or TBTF). This important new book examines the issues surrounding TBTF, explaining why it is a problem and discussing ways of dealing with it more effectively. Gary Stern and Ron Feldman, officers with the Federal Reserve, warn that not enough has been done to reduce creditors' expectations of TBTF protection. Many of the existing pledges and policies meant to convince creditors that they will bear market losses when large banks fail are not credible, resulting in significant net costs to the economy. The authors recommend that policymakers enact a series of reforms to reduce expectations of bailouts when large banks fail.

加里•斯特恩

★经济学家、银行家，曾任美联储下属明尼阿波利斯联邦储备银行行长。

★斯特恩是美国国家经济教育理事会的董事会主席。

★在担任明尼阿波利斯联邦储备银行行长之前，他曾任职于哥伦比亚大学、华盛顿大学和纽约大学。

罗恩•费尔德曼

★经济学家、银行家，美国明尼阿波利斯联邦储备银行高级副总裁。