Today, the nation’s four
largest banks are nearly $2 trillion larger than they were before the crisis, with a greater market share than ever. And the federal help continues, not as direct bailouts, but in the form of an implicit government guarantee. The market knows that the government won’t allow these institutions to fail. It’s the ultimate insurance policy.....one with no coverage limits or premiums.
These institutions can borrow and lend money at a lower rate than regional banks. And this implicit taxpayer subsidy has been confirmed by three independent studies in the last year; one of them
estimated it at $83 billion per year. We have, in essence, a financial system that rewards banks for their size, not the quality of their operations.
