Who benefits from the implicit subsidy to ‘too big to fail’ banks?

From Bank Underground –
“Governments have often supported troubled banks whose failure would damage the wider economy. The expectation of such bailouts amounts to free insurance for those who have lent money to these ‘too big to fail’ (TBTF) banks. This amounts to an ‘implicit subsidy’ from the government, with a value that may be as large as £100bn. But where does this money go? We think most of the benefit goes to those who own or work for banks. But verifying this empirically is a challenge requiring further research.”

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Don't Be Fooled: Banks Still Too Big to Fail

From truthout

‘Analyzing a government report is like eating and digesting a meal — better to take it slowly than gobble quickly and suffer the possible consequences.

Example: last Thursday’s report from the Government Accountability Office (GAO) on whether or not large financial institutions were still perceived as “too big to fail.”

The immediate takeaway by many in the media, government and investment community was that the need for a taxpayer subsidy like the bailouts of 2008 “may have declined or reversed in recent years” and, in the words of Mary J. Miller, the Treasury Department’s under secretary for domestic finance, “We believe these results reflect increased market recognition of what should now be evident – Dodd-Frank ended ‘too big to fail’ as a matter of law.”

But with just a little time to digest the GAO’s findings, much of the response has shifted to, “Not so fast.” ’

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Top 10 Biggest Investment Failures Ever

From Daily Finance

“As an investor, you need to be smart about where you're putting your money to work. Investing your hard-earned cash in companies that won't use it well - or in products that haven't proven themselves -- can quickly come around to bite you. Case in point? These 10 famous examples of investment gone horribly wrong.”

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'Too Big to Fail' a Myth? What a Relief

“What a relief it was to read that the "too big to fail" problem — in which the nation's largest financial institutions benefit from government support because of the risks they pose — does not exist!”

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What we are reading … 4th March 2013

Consumers remain resistant to digital banking aspirations http://dld.bz/cm5Sy

Banking Fraud: Trends and Technologies http://dld.bz/cm5Ss

Majority of Americans Desire Portable Bank Account Numbers: Study http://dld.bz/cm5Sq

Fed Publishes Interactive Bank Failure Map http://bankinnovation.net/2013/02/fed-publishes-bank-failure-map/

New Startup Passport Aims to Take the Pain out of International Money Transfers http://dld.bz/cmc5y

MasterCard's Mobile World Symposium: mPayments Around The Globe http://shar.es/j6CR8

Samsung unveils 'Wallet', an Android alternative to Apple's Passbook http://shar.es/j6CbO
More convenience, less privacy http://reut.rs/Y0uVdQ