Talk about hedging your bets. In what became known as Pascal’s Wager, the 17th-century French philosopher Blaise Pascal argued that the only rational response to the question of the existence of God was to assume that he exists and live your life accordingly. If it turns out that God does not exist, your downside is pretty limited. However, if he does exist and you chose not to believe in him, your downside is almost infinite. So it is with the debate over “too big to fail”.

The potential consequences of a big bank failing if the problem has not been properly solved are so catastrophic that it makes logical sense to assume that the problem is alive and well.