The latest issue of the IMF’s Global Financial Stability report (GSFR, March 2014) provides a comprehensive analysis of the “too important to fail” (TITF) problem. http://www.imf.org/External/Pubs/FT/GFSR/2014/01/index.htm The TITF problem is a well-known one in banking literature, and it arises from the fact that in an interconnected financial world, the failure of a major financial institution can have severe negative macroeconomic and macrofinancial impacts on both a national and global basis, therefore forcing governments to intervene to prevent a financial collapse. The two decades preceding the 2008 financial crisis witnessed an unprecedented period of financial globalization. Cross-border bank claims (as…