Yes it’s true Bloomberg.com says, The big banks do get an $83 billion subsidy from taxpayers

Last month Bloomberg.com stated in an editorial that the big banks enjoy a massive “too big to fail” subsidy created by Dodd-Frank. Other banks will lend to banks with a TBTF designation at a lower rate than they would otherwise because they know that a TBTF bank is ultimately backstopped by the taxpayer. Incredibly the subsidy constitutes nearly all of the profitability of the banking sector.

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Another Absolute Must Read from Matt Taibbi : Gangster Bankers

Too big to fail and too big to jail are essentially the same sort of crap, with different smells. In both phenomena recklessness is rewarded  and broader society is made to pay in obvious and not so obvious ways.

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George Will Says Break Up the Big Banks

The mega-banks are “mega” because the government helped make them that way. Instead of letting the big banks fail in 2008, Hank Paulson swept in and backstopped them, bailed them out, even though the market was trying to correct for years of stupidity both from Wall Street and Washington. The universe wanted to break up the cartel, but the government would not let it.

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The letter to Eric Holder from Senators Brown (D) and Grassley (R) asking why the big banks appear to be “too big to jail” in the eyes of the DOJ.

The HSBC money laundering settlement is a classic example of this. The LIBOR scandal is probably another great example.

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