What are the three approaches to limiting the too-big-to-fail problem?

Select all that apply.

A.

Imposing stricter regulations on SIFIs, and through application of the Volcker rule.

B.

Forcing the large SIFIs to break up their different activities into smaller, cohesive companies.

C.

Loosing regulations to restrict conflicts of interest at credit-rating agencies.

D.

Imposing higher capital requirements on the large SIFIs.

E.

Completely nationalizing GSEs but force them to shrink dramatically

What is the disadvantage of the break up large, systemically important financial institutions?

A.

There might be a decrease in the efficiency of the financial system.

B.

There is elimination of the countercyclical capital requirements.

C.

The new institution are inable to withstand losses if they occur.

D.

The government becomes obliged to bail out the created institutions if they fail.