Something new everyday …sigh!Not to mention this amount is about the same size of the $85 billion in deep cuts set to ripple across country.
What is going on in the U.S.?
Bloomberg-
Our calculation, in a Feb. 21 editorial, showing that the top 10 U.S. banks receive a taxpayer subsidy worth $83 billion a year has generated some, um, discussion. It’s a big number, and the subsidy is a big issue for the banks.
How did we get there? To recap, the largest banks can borrow money at a lower rate because creditors assume the government, on behalf of taxpayers, will rescue them in an emergency. In a 2012 study, two economists — Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz — estimated the value of that too-big-to-fail subsidy at about 0.8 percentage point. We multiplied that number by the top 10 U.S. banks’ total liabilities to come up with $83 billion a year.
Some said that we shouldn’t have used total liabilities in the calculation. A lot of those liabilities are customer deposits, the argument went. Since these are explicitly guaranteed by the Federal Deposit Insurance Corp., why would the subsidy apply to them?
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