Sometimes we coin terms without actually having a good definition for them. I'm thinking about "toxic assets" but also "too big to fail," which I've now seen as simply TBTF.

Vincent Reinhart who spent 25 years at the Fed, took a stab at defining it during a recent talk.

"Too big to fail," he said is "a big umbrella today, covering banks and non-banks." He threw up a slide defining four categories of TBTF:

 

- Too big to fail
- Too complicated to resolve
- Too interconnected to close
- In too many House districts to touch

"Actually, I made that last one up," he said, but noted that "there is a political dimension to 'too big to fail' that, once you start doing it, becomes more and more in play."

He was making a joke, but the problem of defining TBTF is really at the center of how we prevent this kind of banking crisis from happening again.