Editing Systemic risk (section)

====Too connected to fail====
{{Main|Too connected to fail}}
A more useful systemic risk measure than a traditional TBTF test is a "too connected to fail" (TCTF) assessment.  An intuitive TCTF analysis has been at the heart of most recent federal financial emergency relief decisions  TCTF is a measure of the likelihood and amount of medium-term net negative impact to the larger economy of an institution's failure to be able to conduct its ongoing business.

Network models have been proposed as a method for quantifying the impact of interconnectedness on systemic risk.<ref>R Cont, A Moussa and E. B. Santos (2013) [https://cib.epfl.ch/images/website/ContMoussaSantos.pdf Network structure and systemic risk in banking systems] in: Handbook of Systemic Risk, Cambridge University Press, p 327-368.</ref><ref>Nacaskul, P. (2010) Systemic Import Analysis (SIA) – Application of Entropic Eigenvector Centrality (EEC) Criterion for a Priori Ranking of Financial Institutions in Terms of Regulatory-Supervisory Concern, with Demonstrations on Stylised Small Network Topologies and Connectivity Weights, 14 May 2010, Bank for International Settlements (BIS) Asian Research Financial Stability Network Workshop, 29 March 2012, Bank Negara Malaysia, Kuala Lumpur. {{ssrn|1618693}}. {{doi|10.2139/ssrn.1618693}}.</ref><ref>Nacaskul, P. & Sabborriboon, W. (2011) Systemic Risk – Identification, Assessment and Monitoring based on Eigenvector Centrality Analysis of Thai Interbank Connectivity Matrices, 27 December 2011. {{ssrn|2710476}}. {{doi|10.2139/ssrn.2710476}}.</ref>

The impact is measured not just on the institution's products and activities, but also the economic multiplier of all other commercial activities dependent specifically on that institution. It is also dependent on how correlated an institution's business is with other systemic risk.<ref>[http://www.pciaa.net/web/sitehome.nsf/lcpublic/392/$file/PCI_Systemic_Risk_Definition.pdf Too Big to Fail], Property Casualty Insurers Association of America</ref>