An Alternative Plan to Fix TBTF: Lay Big Banks’ Subsidy Bare

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Cornelius Hurley, School of Law, Center for Finance, Law & Policy

Ending “too big to fail” may be the single public policy goal that everyone in financial services agrees on…

Expert quote:

“It’s earnings that the company didn’t earn. These earnings were given, in the form of free insurance, subsidy, whatever you want to call it. It’s a subsidy from the taxpayers. If you clean the slates every Jan. 1 and let them use that subsidy to buy stock or dividend it out, then what’s the point? The idea of having it accumulate is that over time this gift from the taxpayers can be used to incent them to get smaller.”

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