The origin story of “too big to fail”

Marketplace

News, Business

4.6 • 8.5K Ratings

🗓️ 13 April 2023

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

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Summary

The phrase “too big to fail” conjures images of the 2007-08 financial crisis. But the notion that the collapse of certain financial institutions could torpedo the larger economy goes back much further. On today’s show, we’ll trace the roots and evolution of “too big to fail.” Plus: earnings reports from TBTF banks, new car prices and the rebranding of milk.

Transcript

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0:00.0	Banks, banks, banks, banks, banks, banks, and milk.
0:09.6	From American public media, this is Marketplace.
0:22.2	In Los Angeles, I'm Kyle Rizdole.
0:24.0	It is Thursday, today is the 13th, April good is always to have you along.
0:29.0	The macro economic word of the day today is bell weather.
0:34.6	The good people at Merriam Webster, defined it as an indicator of trends, which is right
0:39.9	up our alley, trying as we do on this program to spot trends in this economy.
0:45.8	Anyway, the economic bell weather is we've got in mind today are banks.
0:50.7	The big ones, JP Morgan, Citigroup, Wells Fargo and PNC, which are going to report earnings
0:55.3	tomorrow, details of which are going to be combed over even more minutely than usual,
1:00.8	given the failure last month of Silicon Valley bank and signature and the overall banking
1:06.5	unease right now.
1:08.1	Marketplace's Mitchell Hartman gets us going today.
1:11.6	As we begin to dissect earnings reports tomorrow, the first big question will be, after
1:16.4	the unexpected bank failures of March, can we expect more trouble?
1:21.2	CFRA research analyst Ken Leon says, for the mega banks, there's not too much to worry
1:26.6	about.
1:27.6	We're going to see stable financial results in line or better than expected.
1:33.6	He says these banks have actually fattened up as depositors pulled their money out of
1:38.1	smaller banks following last month's bank runs.
1:41.6	And says Matt Callyer, Moody's analytics, they face less financial risk than their smaller
1:46.6	peers.
	...

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