Webmaster Forum

Go Back   Webmaster Forum > The Webmaster Forums > Forum Lobby > Controversial Social Issues

Controversial Social Issues Discussions concerning controversial social issues. Topics include politics, religion, culture, social and economic issues, etc. Respect required at all times.

Thread Tools Display Modes
Share |
Old 05-10-2013, 09:40 AM
Franc Tireur Franc Tireur is offline
Contributing Member
Join Date: 08-15-06
Posts: 10,109
iTrader: 11 / 100%
Too-Big-To-Fail Banks Have Raked In $102 Billion In Subsidies Since 2009

biggest banks want you to believe that they get no special advantage, no subsidies, from being too big to fail. And yet people keep finding evidence of those subsidies.

The latest is World Bank economist Deniz Anginer, in a study for Bloomberg Markets magazine. Anginer estimates that the six biggest U.S. banks have saved $82 billion in borrowing costs since 2009 because investors believe the government will never let them fail and thus don't charge as much to lend them money as they do smaller banks. The report will be published in the June issue of the magazine.

Together with dirt-cheap government borrowing programs, Bloomberg estimates these banks -- JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley -- have saved $102 billion since 2009 because of their size advantage.

This estimate is actually a little smaller than the $83 billion-per-year subsidy that Bloomberg View, Bloomberg's op-ed arm, touted earlier this year. In fact, several studies have come up with different numbers for the subsidy, evidence of just how tricky it is to measure.

Some observers argue that the subsidy might not exist at all. That argument is the one the big banks prefer, predictably, because they would like not to be made smaller, if it's all the same to everybody. In fact, they have paid for their own research arguing they have no subsidy.

U.S. policy makers believe there is a subsidy, though they are loath to quantify it. Federal Reserve Chairman Ben Bernanke in February confessed to Sen. Elizabeth Warren (D-Mass.) that the subsidy exists, although he disagreed with the $83 billion per year estimate. And Fed Governor Jeremy Stein last month agreed that a subsidy exists and is a problem.

Ending the subsidy and the possibility that taxpayers will have to bail out a big, failing bank is the aim of the bill introduced last month by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.). That measure would force the biggest banks to hold more capital.

Mortified, the big banks have joined forces and hired some political helpers, including Republican Tony Fratto and Democrat Stephanie Cutter, to push back against the momentum for breaking them up, the Wall Street Journal wrote earlier this week.

Hilariously, big bank officials briefly considered pushing smaller community banks -- which don't enjoy the subsidy that the big banks get and are thus at a competitive disadvantage -- to help them with the pushback, the WSJ reported. Wisely, they dropped the idea.

Another day, another story...
Reply With Quote



Go Back   Webmaster Forum > The Webmaster Forums > Forum Lobby > Controversial Social Issues


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Ending U.S. Fossil Fuel Subsidies Franc Tireur Controversial Social Issues 6 10-30-2012 08:50 PM
The Too Big To Fail Banks Are Now Much Bigger And Much More Powerful Than Ever Franc Tireur Controversial Social Issues 3 04-19-2012 08:32 AM
Selling 2008, 2009 Co-Reg/MLM Leads for up to Oct 2009 - Full info! mbadran2010 Content 0 11-04-2009 04:54 PM
9 banks in major holding company fail Franc Tireur Controversial Social Issues 0 10-31-2009 09:05 AM

V7N Network
Get exposure! V7N I Love Photography V7N SEO Blog V7N Directory

All times are GMT -7. The time now is 11:14 AM.
Powered by vBulletin
Copyright 2000-2014 Jelsoft Enterprises Limited.
Copyright © 2003 - 2018 VIX-WomensForum LLC