"Too big to fail" (TBTF) is a theory in banking and finance that asserts that
certain corporations, particularly financial institutions, are so large and
so interconnected that their failure would be disastrous to the greater
economic system, and that they therefore must be supported by
governments when they face potential failure. The colloquial term "too
big to fail" was popularized by U.S. Congressman Stewart McKinney in a
1984.
During the financial crisis of 2007–2008, the Federal Reserve bailed the
company (AIG) out for $180 billion and assumed controlling ownership
stake, with the Financial Crisis Inquiry Commission correlating AIG's
failure with the mass sales of unhedged insurance. AIG repaid $205 billion
to the United States government in 2012