Too Big To Fail Law and Legal Definition

Too Big To Fail is a concept that some financial institutions are so large that the federal government cannot allow them to fall into bankruptcy, or fail, because to do so would have a devastating effect on the nation's economy. It is thought that companies that fall into this category take positions that are high-risk, as they are able to leverage these risks based on the policy preference they receive. The term has emerged as prominent in public discourse since the 2007–2010 global financial crisis.