“The Government Accountability Office is poised this fall to unveil the first of two reports on whether big banks benefit from an implicit subsidy due to the perception that they are “too big to fail,” adding more fuel to an already contentious debate.
“The new research will arrive on the heels of numerous academic and industry studies already released, with more likely on the way. At issue is the question of whether large institutions get tangible benefits, including a lower cost of funding, because the market believes regulators would prevent them from failing.
“Following are some frequently asked questions about the state of the “too big to fail” subsidy debate and the potential impact of the upcoming GAO report.”
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