The eight biggest U.S. banks earned more than $80 billion last year, with much of that coming from government subsidies, according to a new report from the International Monetary Fund. Worst of all, the Dodd-Frank reforms and Basel III regulations haven’t done much to reduce these subsidies.
Banks make money by borrowing at lower interest rates than they earn on their loans and other assets. Banks’ borrowing costs are lower than they might be otherwise because their debt is guaranteed by the government. Deposit insurance is an explicit form of government protection, and banks pay for it.
- 44October 22, 2014 Santiago, Chile The US government’s debt is getting close to reaching another round number—$18 trillion. It currently stands at more than $17.9 trillion. But what does that really mean? It’s such an abstract number that it’s hard to imagine it. Can you genuinely understand it beyond just…