ADB Economics Working Paper Series
Ending “Too Big To Fail”:Government Promises versus Investor Perceptions
Todd A. Gormley, Simon Johnson,and Changyong RheeNo. 314 October 2012
Todd A. Gormley is Assistant Professor of Finance atthe Wharton School, University of Pennsylvania.Simon Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at the Sloan School of Management,MIT and a Senior Fellow at the Peterson Institute forInternational Economics, Washington, DC.Changyong Rhee is Chief Economist, Economics andResearch Department, Asian Development Bank.We are grateful to Bruno Biais, Olivier Blanchard,Hülya Eraslan, Mike Faulkender, Radha Gopalan,Marco Pagano, Ernst-Ludwig von Thadden, Vikrant Vig,and participants at the CEPR European SummerSymposium in Financial Markets, the Olin BusinessSchool –Washington University in St. Louis Financeluncheon, MIT Development & Finance lunches, andthe World Bank Finance Research Group Seminar fortheir many useful comments. All remaining errors andomissions are our own. This paper has been previouslypublished as NBER Working Paper 17518.