Does Romney understand 'Too Big to Fail'?

Mitt Romney today in our interview articulated a decent distinction when it comes to bailouts: saving banking institutions is not the proper role of government, even if saving the banking system is.

But when I asked him about TARP, he defended the government’s saving of institutions. This led me to wonder if Romney’s distinction has any teeth. In other words, if the institution is big enough, would he feel the need to save it (the sort of thing that fuels moral hazard and distorts the economy) or would he wind it down.