That's the message from the government's reluctance to swoop in and bail out one of the nation's biggest commercial lenders, CIT Group Inc, as it struggles to stay afloat. But even though CIT doesn't have the firepower to take down the global financial system, its failure would certainly be felt by some of the struggling small businesses that rely on its financing.
CIT is negotiating with its regulators to find a solution to its near-term liquidity problems, but speculation that it will file for bankruptcy has intensified after the Wall Street Journal reported that it was preparing for a possible filing.
Not that you can blame the Federal Deposit Insurance Corp and the tough-minded Sheila Bair for thinking twice about supporting a junk-rated lender that has already sucked in more than $2 billion of government funds.
A failure, however, could still hurt Main Street since it's sure to make already tight credit conditions even more restrictive for businesses already on the ropes. This is important for regulators as well as investors to keep in mind.
For the last two years, dangers in the esoteric corners of the opaque credit markets were the ones that needed minding. Problems with complicated and difficult-to-understand structured credit products helped fell financial giants like