It's the forest stupid
The Dodd-Frank financial reform legislation requires regulators to identify "systemically important" financial institutions and subject them to greater regulation. Sounds good on paper, but it's fraught with problems.
One of my principal concerns is that indentifying "systemically important" bank and non-bank firms sends a signal to the markets that those institutions are subject to greater government oversight and are thus less likely to be allowed to fail. The moral hazard of "too big to fail
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