Wednesday, February 27, 2013

Why Isn’t Wall Street Paying Back Taxpayers For Being ‘Too Big To Fail’?

By Pat Garofalo posted from ThinkProgress Economy on Feb 27, 2013

During a Senate Banking committee hearing on Tuesday, Sen. Elizabeth Warren (D-MA) grilled Federal Reserve Chairman Ben Bernanke on whether Wall Street banks should have to pay back U.S. taxpayers for the implicit funding advantage those banks receive by virtue of being viewed as “too big to fail.” According to a Bloomberg News study, big banks are essentially subsidized by about $83 billion per year because investors anticipate that those banks will be saved by the government if they get in trouble.

“These big financial institutions are getting cheaper borrowing to the tune of $83 billion in a single year simply because people believe the government would step up and bail them out. If they are getting it, why shouldn’t they pay for it?” asked Warren:


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