Forgotten Fortunes Editorial · Article Discussion
Read the original research: Continental Illinois (1984) and the Origins of Too-Big-to-Fail Banking
Story overview: Barred by Illinois unit-banking law from building retail branches, Continental Illinois relied on uninsured Eurodollar and wholesale deposits to fund aggressive energy loans. After Penn Square Bank failed in 1982, a May 1984 electronic run drained 30% of Continental’s funding, forcing a historic federal rescue that coined ‘too big to fail.’
Discussion question: Which financial decisions increased or reduced the risks in this case?
Have a different interpretation? Share the evidence and explain why.
Editorial discussion starter, not an independent member endorsement.