Volcker says must let big financial firms fail

WASHINGTON Feb 14 (Reuters) - Large financial institutions that engage in speculative activities for profit should be allowed to fail if they get in trouble, White House advisor Paul Volcker told CNN on Sunday.

"If a big non-bank institution gets in trouble and threatens the whole system, there ought to be some authority that can step in, take over that organization and liquidate it or merge it -- not save it," Volcker said.

"It's called euthanasia, not a rescue."

(Reporting by Pedro Nicolaci da Costa, Editing by Sandra Maler)