It is big……and yet not that big
The original idea came from Wall Street during the financial crisis ; many major banks which are in trouble. Yet the government will save them with taxpayers’ money regardless of their ruthless investment strategy and short term planning. In view of public interest It’s still more sensible to save them rather than let them die.
In shipping industry, we see similar scenarios in different countries. From Taiwan, Singapore, Korea, many governments save their local container lines which are in deep losses and provide financial help.
Surprisingly, the biggest physical supplier in the region not only did not receive any help but the government / MPA rather stayed in silence. Same for Brightoil, used to be a private enterprise that can compete with Chimbusco and Sinopec, also going down without much aid from chinese government.
Therefore, too big to fail might be a bad strategy for a company to operate, as we might give you a false sense of security, like climbing a mountain and you think there is a safety net but actually there is none. The best way to climb is if you know you might die on one wrong step and thus have your 100% effort and focus.
until next time
