FOR IMMEDIATE RELEASE
ICBA Statement on IMF Study Estimating Too-Big-To-Fail Subsidy at $70 Billion in U.S., $300 Billion in Europe
Washington, D.C. (April 1, 2014)—Independent Community Bankers of America® (ICBA) President and CEO Camden R. Fine released this statement on an International Monetary Fund report that found that the too-big-to-fail financial institutions received taxpayer-funded subsidies of up to $70 billion annually in the United States and $300 billion in the euro area in 2012.
“IMF researchers have once again concluded that the nation’s largest financial firms enjoy a funding advantage over smaller institutions because they are considered too big to fail. Further, the IMF found that the too-big-to-fail funding advantage—estimated at upwards of $70 billion in the United States—has only intensified in the wake of the financial crisis.
“Because the crisis left little uncertainty about the willingness of governments to support big banks in distress and because banks have continued to grow bigger in our consolidating banking industry, the too-big-to-fail threat remains powerful and dangerous despite Washington’s efforts to address the problem.
“That is why ICBA supports real reforms to take on too-big-to-fail, such as the Terminating Bailouts for Taxpayer Fairness (TBTF) Act (S. 798), introduced by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.). The TBTF Act would require the largest and riskiest banks to hold more leverage equity capital to reduce their risks and avoid future taxpayer bailouts.
“Greater protections against future crises and additional financial diversity will help reduce systemic risk, mitigate taxpayer exposure to bailouts, promote competition and ultimately support the availability of credit to consumers and businesses.”
The Independent Community Bankers of America®, the nation’s voice for nearly 7,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.