The chart above comes from a piece penned by Bob Ivry, who explored the unfair advantages of the TBTF banks.
Note the chart shows how the ratings agencies would change their views — and credit ratings — of TBTF banks without the implicit promise of a bailout when any of these banks screw up. Another chart after the jump shows how bond buyers accept lower returns from TBTF banks given the governments implicit guarantees.
Ivry wrties:
“These six banks — Bank of America Corp. (BAC), Citigroup Inc. (C), Goldman Sachs Group Inc., (GS) JPMorgan Chase & Co. (JPM), Morgan Stanley (MS) and Wells Fargo & Co (WFC). — have also benefited from tax breaks and Federal Reserve largesse since the end of 2008 in the form of additional income from the central bank’s mortgage-bond purchases and the interest it pays for bank deposits.
All told, the financial advantages for the six biggest banks since the start of 2009 amounted to at least $102 billion, according to data compiled by Bloomberg.”
Its Socialism for the banks, Capitalism for the rest of us . . .
Source:
No Lehman Moments as Biggest Banks Deemed Too Big to Fail
Bob Ivry
Bloomberg Markets Magazine, May 10, 2013
http://www.bloomberg.com/news/2013-05-10/no-lehman-moments-as-biggest-banks-deemed-too-big-to-fail.html
Source: Bloomberg Markets Magazine
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