systemic risk

The financial crisis crystallized the realities of systemic risk -- the idea that in certain panic-stricken environments, no company reliant on functioning credit markets is safe, even if it is fundamentally sound on its own merits. No company may have been hurt more by guilt-by-association during...

The hundreds of billions in rescue funds needed to support banks -- and the trillions in implicit subsidies -- has brought the question of appropriate institutional size to the forefront of regulatory reform. Not surprisingly, FDIC Chairwoman Sheila Bair and Federal Reserve Chairman Ben Bernanke...

In the years ahead, whenever economic conservatives and market absolutists point out the wonders of the market, just mention a popular four-letter word. Actually, this particular word has only three letters: AIG. And the issue is not the bonus controversy -- far from it. While the public voices...

The more I learn about why we've committed $180 billion to a company that lost $99 billion in the last year, the more I scratch my head and wonder: Why we don't just let it fail? The answer that comes out of the government seems to be because of 'systemic risk.' But one thing that does not come out...