Professor Gregory Connor:

When any large corporation or manufacturing facility fails, it causes economic dislocation. It is not just the owner who suffers but also the families of those who work there, local shopkeepers and others. Banks, by their nature, are tied into everything so when a bank fails it causes widespread economic dislocation. There is naturally a big public externality to bank failure. The question then is whether we should offset that with a moral hazard problem and never let them fail. When banks start to fail, do we inject free taxpayer-based funds to keep them in business? It is a very difficult problem. The "too big to fail" problem is not a simple one.