DN! Taxpayers Are Subsidizing Bank of America, Citigroup, Wells Fargo and Other Large Banks
6A Hidden $34 Billion Bank Subsidy? Study Exposes How Taxpayers Are Subsidizing Bank of America, Citigroup, Wells Fargo and Other Large Banks
One of the key terms to come out of the nations economic meltdown has been too big to fail. The government has funneled billions of dollars to large financial firms by arguing that their collapse would deal an irreparable blow to economic recovery. A new study has calculated the tab of the too big to fail approach, and it amounts to a far larger taxpayer-funded subsidy than previously thought. The Center for Economic and Policy Research says the bailout has allowed too big to fail banks to pay significantly lower interest rates than those paid by smaller banks. According to one estimate, thats meant a subsidy for the nations eighteen largest bank holding companies of $34.1 billion a year. That amount represents nearly half these companies combined annual profits. We speak to the studys author, Dean Baker.