Introduction “Too Big to Fail” is a clichéd theory that establishes the importance of (financial) institutions in relation to the economy. Their importance is so remarkable and so pronounced that the implosion of a “too big to fail organization” will have a domino effect on the entire economy, leading to serious and negative consequences. To avoid these negative consequences, once a (financial) organization achieves the special status of the Too Big To Fail league, the government will (undoubtedly) step in to bail out such an institution if and when it finds itself in financial waters troubles, whatever the situation. cause and source of the problem. Simply put, these institutions are favored and aided directly and indirectly by the government and its agencies through financial distributions, favorable monetary and economic policies. Sometimes this takes the form of direct cash injections, sometimes loan guarantees. Before a bank can be described as too big to fail, the criticality of the roles played by such a bank, its complexity, leverage, interconnectivity and size are some of the factors to be considered. On the size of these banks, Berger et al. (1997) found that some individual banks and the banking system as a whole in Europe reached enormous size relative to their countries' GDP. In Iceland, the liabilities of the overall banking system were around 9 times GDP at the end of 2007, while they were 6.3 and 5.5 in Switzerland and the United Kingdom, respectively. Too big to fail is not really a new syndrome; the term itself dates back to 1984, when the FDIC purchased Continental Illinois, then the seventh largest US bank (Feldman and Rolnick, 1998). This is the effect resulting from the typical problem of bank panics and bankruptcies. ...... middle of paper ...... uts) should be avoided, which will certainly lead to even more unbridled risk-taking. Government actions, policies, and regulations must be weighed in light of their effects on morality. risk, in short, if it reduces moral hazard, it's ok. If it increases it, it should be ignored. The relationship between fear and greed as two driving forces of a responsible capitalist (if such a term exists) must be encouraged, if you take a risk you must be willing to bear it. It is pure madness to leave the market free to its own design while believing that it is self-regulating, the market has never and will never self-regulate, and the greed and selfishness which are the foundation of capitalism will distort the balance. If the market or those who believe in the need for government regulation, here is the bottom line: markets will not regulate themselves, so government must.