While there is much public posturing in Washington on the issue of too-big-to-fail, the more important issue than scale is safety.

FORBES: Why JPMorgan Chase Is Unsafe At Any Scale

In general, effective government oversight of individual institutions increases financial resilience and reduces moral hazard by attempting to ensure that all financial firms with access to some sort of federal safety net--including those that creditors may believe are too big to fail--maintain adequate buffers of capital and liquidity and develop comprehensive approaches to risk and liquidity management.

FORBES: Transcript

But if investors fail to spot the jiggery-pokery with credit scores and the outright fraud that permeated the subprime market, that cushion of safety quickly disappears.

ECONOMIST: Securitisation