Too Big to Fail, a buzzword of the season, can be a misleading misnomer. As applied to financial service companies, the term does not necessarily mean too large merely in a capital sense, or even too interconnected. What the failure of Lehman Brothers taught with hindsight was that the government did not fully accept in September 2008 that Lehman was in fact a financial utility, a member of an oligopoly whose ancillary businesses perform core lending and banking services.
“General loathing of government involvement in financial markets had allowed banks and investment banks to become…
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