ABSTRACT
The collapse of Lehman Brothers in 2008 precipitated a global financial crisis that led to widespread job losses, millions of home foreclosures, and, in some cases, loss of life. Systemic risks thus present both ethical and economic challenges. This chapter explores the concept of “too big to fail” from a risk ethics perspective, addressing a critical question: Are too big to fail banks an acceptable risk in efficient market economies, or do they represent unacceptable risk impositions that require regulation? This question is increasingly urgent as, more than a decade after the financial crisis, large banks have grown even larger, global debt levels have increased, and the financial system is still extremely fragile.
