“It’s been almost a year since we caused a stir by pointing out that the largest U.S. banks received a taxpayer subsidy worth an estimated $83 billion a year. What’s changed since then?

“Better banking rules are coming into force, and if they work they’ll reduce the subsidy. It would be good to know exactly how much. Unfortunately, measuring the transfer in real time is something regulators aren’t well equipped to do.

“Policy makers and legislators have largely come to accept that the subsidy is there. The biggest and most systemically important banks can borrow more cheaply than they otherwise would, because creditors expect the government to rescue them in an emergency. This is an unfair and unintended transfer of wealth to bank shareholders and executives, and it weakens market discipline by desensitizing banks to risk. In effect, banks are being rewarded for presenting a threat to the economy.”

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Read full Bloomberg editorial here