196 ISSN 2029-8234 (online) VERSLO SISTEMOS ir EKONOMIKA BUSINESS SYSTEMS and ECONOMICS Vol. 3 (2), 2013 DYSFUNCTIONS AND RISKS OF BIG FINANCIAL INSTITUTIONS Piotr MASIUKIEWICZ Warsaw School of Economics Al. Niepodleglosci 162, 02-554 Warszawa, Poland E-mail: piotr.masiukiewicz@wp.pl, Pawel DEC Warsaw School of Economics Al. Niepodleglosci 162, 02-554 Warszawa, Poland E-mail: paweldec@gmail.com doi:10.13165/VSE-13-3-2-06 Abstract: e recent economic crisis has shown that even very large companies, such as gi- ant-sized business and seemingly unimaginable total assets, may fall. e authors put the research objective, which was to examine the characteristics of management in large financial companies and banks, according to the criteria adopted in the theory of praxeology and to identify the main risks and dysfunction, as well as risk mitigation instruments in this field. It is significant that the escalation of threats arising from the existence of systemic risk is a feature of modern financial markets. is paper examined in detail the theoretical aspects of large companies and the risk of financial market activity. Keywords: crisis, risk, praxeology criteria, financial institutions, large structure. JEL Classification: E5, E6, G32. Introduction Aſter the recent international financial crisis has taken a broad discussion (involved in the academia, government experts, the European Commission, etc.), concern for the size of business, particularly in the financial markets, has grown. Basic criticism was directed towards the doctrine of too big to fail and too important to fail. e result of the analysis and international reports was to impose a partial responsibility for the crisis and gradual introduction of spec-regulation for large financial institutions within the European Union and the United States. e purpose of this paper is to analyze the characteristics of management in big fi- nancial companies in accordance with the criteria adopted in the theory of praxeology and to identify the main risks and dysfunction, as well as instruments to reduce and minimize the risk in this regard. e paper also provides illustrative examples of financial institu-