Event
Rescue of Continental Illinois, 1984
In May 1984 a run on Continental Illinois led the FDIC, the Fed and the Comptroller to a rescue that covered all depositors. At House hearings in September and October a member said the rule had created “a TBTF—too big to fail”; the Comptroller conceded regulators had no way yet to let a large bank fail.
- Dates
- May–Oct 1984
In May 1984 a run on Continental Illinois led the FDIC, the Fed and the Comptroller to a rescue that covered all depositors. At House hearings in September and October a member said the rule had created “a TBTF—too big to fail”; the Comptroller conceded regulators had no way yet to let a large bank fail.
Connections 6
involved
- Continental Illinois National Bank and Trust Company the bank that was rescued Primary record 1
- Federal Deposit Insurance Corporation covered all deposits Primary record 1
- Federal Reserve lent to the bank at the discount window Primary record 1
- Stewart B. McKinney used the phrase at the House hearing, in his opening statement and again at p. 300 Primary record 2
- U.S. House of Representatives a 1985 staff report to its Banking subcommittee, speaking for the staff only, concluded that under current policy certain banks are “too big to fail”; at the hearing the Comptroller, C. T. Conover, said regulators had no way yet to let a large bank fail Primary record 23
led to
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Too big to fail
Primary record
14
The New York Fed notes the phrase appeared in the 1970s about Lockheed and in print about Continental before the hearings. The FDIC’s history calls it inaccurate: too big to liquidate would have been more appropriate.
Timeline 1 date
- May–Oct 1984 Rescue of Continental Illinois, 1984
Proof 4 sources
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History of the Eighties: Lessons for the Future, Volume I, chapter 7: Continental Illinois and Too Big to Fail, Federal Deposit Insurance Corporation, 1997.
Primary record
As the nation’s seventh-largest bank, Continental forced regulators to recognize not only that very large institutions could fail but also that bank regulators needed to find satisfactory ways to cope with such failures.
In fully covering all deposits in Continental, the FDIC used a method that contrasted sharply with its continuing use of deposit payoffs in some smaller resolutions.
The run, however, continued, and by Friday May 11, Continental had had to borrow $3.6 billion at the Federal Reserve’s discount window to make up for its lost deposits.
the policy of differential treatment was soon given the rather inaccurate sobriquet of too big to fail
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Inquiry into Continental Illinois Corp. and Continental Illinois National Bank: Hearings before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance, House Committee on Banking, Finance and Urban Affairs, 98th Congress, U.S. House of Representatives, 1984.
Primary record
by creating a new class of bank in the United States of America, a TBTF—too big to fail.
Mr. Chairman, let us not bandy words. We have a new kind of bank. It is called too big to fail. TBTF, and it is a wonderful bank.
I admit that we don't have a way right now. And so, since we don't have a way, your premise appears to be correct at the moment.
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Continental Illinois National Bank: Report of an Inquiry into Its Federal Supervision and Assistance (staff report to the Subcommittee on Financial Institutions Supervision, Regulation and Insurance), U.S. House of Representatives, 1985.
Primary record
The Continental Assistance Program developed by the FDIC and the other federal bank regulatory agencies indicates that, under current policy, certain banks are "too big to fail".
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Historical Echoes: “Too Big to Fail” Is One Big Phrase, Federal Reserve Bank of New York, Oct 2012.
Primary record
Actually, the phrase appeared even earlier, in the mid-1970s, in discussions of Lockheed Corporation.
Page history 3 changes
- Second revision of Too Big to Fail: the FTC's 1917 finding, the 1952 report's seven firms, the 1984 hearing record, and corrected cards for Spirit, beef, tickets, Google and the final verdict05663c47
- Revise Too Big to Fail after the skeptic's review: read to 2 November 2026, a verdict card that separates findings from shares, the 1929 fight with its scandal and the board's stand, and sources for every cardc819f2cb
- Add the story Too Big to Fail: Standard Oil's stockholders, the phrase's origin in 1984, and market-by-market cases to November 2026aa9c434d
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