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Too Big To Fail banks bankrupting America with endless taxpayer subsidies

Taking away the implicit government guarantee of Too Big To Fail banks would increase the interest costs on all their liabilities by 0.8%.

This amounts to $83bn for the top 10 banks.
Taking this implicit government guarantee away would wipe out all of the big banks profits.

The top 5 banks have $9tn in assets equivalent to more than 50% of the US annual economy.
The top 5 banks account for $64bn of the implicit government subsidy for TBTF.

N.B. these implicit government guarantees are exactly the same as the government guarantees for Fannie Mae and Freddie Mac. Private companies with implicit government guarantees that went bust and had to be bailed out at a huge cost to the tax payer.

Source : Research by Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz
http://www.imf.org/external/pubs/ft/wp/2012/wp12128.pdf

Continued at :-
http://ian56.blogspot.co.uk/2013/02/tbtf-banks-bankrupting-a...