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

Dean Baker and Travis McArthur

CEPR Reports and Issue Briefs from Center for Economic and Policy Research (CEPR)

Abstract: 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.

Keywords: Federal Reserve; Treasury; banks (search for similar items in EconPapers)
JEL-codes: E E5 E58 G G2 G21 G24 G28 H H2 H25 (search for similar items in EconPapers)
Pages: 5 pages
Date: 2009-09
New Economics Papers: this item is included in nep-ban, nep-fmk, nep-pke and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (44)

Downloads: (external link)
http://www.cepr.net/documents/publications/too-big-to-fail-2009-09.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:epo:papers:2009-36

Access Statistics for this paper

More papers in CEPR Reports and Issue Briefs from Center for Economic and Policy Research (CEPR) Contact information at EDIRC.
Bibliographic data for series maintained by (cepr@cepr.net).