Why ‘Too Big to Fail’ Is Striking Fear in Nonbanks: QuickTake

After the failure of several big banks nearly crippled the global financial system in the late 2000s, regulators designated the largest remaining lenders as “too big to fail.” These so-called global systemically important banks, or G-SIBs, face the strictest regulatory scrutiny. Now, US regulators have laid the groundwork to extend that level of oversight to other types of financial companies such as hedge funds and asset managers. The move reverses Trump-era guidance that made it much harder to label companies that weren’t banks.

1. What kind of company is “too big to fail”?

A clearer label might be “too big ...