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Recently, the term "too big to fail" has become popularly known. Too big to fail refers to those institutions that, if they failed, would have dramatic and rippling effects on the economy. Five large banks, JPMorgan, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs, fit this label. The assumption by most is that if any of these banks were to fail, they would be bailed out by the U.S. government to avoid a widespread panic. The implication for lenders is that any loans would be repaid by the government even in the event of a bankruptcy. This means that the lenders have an implicit put option on the debt and the borrowers can borrow at a lower interest rate than would be possible without the implicit guarantee. So how much is this bond insurance worth? One estimate puts the savings for the banks at $120 billion between 2007 and 2010. http://www.businessweek.com/articles/2012-07-05/the-price-of-too-big-to-fail