The Value of the “Too Big to Fail” Big Bank Subsidy

One outcome of the TARP and other bank rescue efforts following the collapse of Lehman Brothers in September of 2008 is that the United States has essentially formalized a commitment to a “too big to fail” (TBTF) policy for major banks. This paper uses data from the FDIC on the relative cost of funds for TBTF banks and other banks, before and after the crisis, to quantify the value of the government protection provided by the TBTF policy.

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Year of publication:	2009-09
Authors:	Baker, Dean ; McArthur, Travis
Institutions:	Center for Economic and Policy Research (CEPR)
Subject:	Federal Reserve \| Treasury \| banks

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Extent:	application/pdf
Series:	CEPR Reports and Issue Briefs.
Type of publication:	Book / Working Paper
Language:	English
Notes:	5 pages
Classification:	G - Financial Economics ; G2 - Financial Institutions and Services ; G21 - Banks; Other Depository Institutions; Mortgages ; G24 - Investment Banking; Venture Capital; Brokerage ; G28 - Government Policy and Regulation ; H - Public Economics ; H2 - Taxation, Subsidies, and Revenue ; H25 - Business Taxes and Subsidies ; E - Macroeconomics and Monetary Economics ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008545819