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So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. - - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits (see tables for data on individual banks). In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the U.S. economy -- would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.
Regulators can change the game by paring down the subsidy. One option is to make banks fund their activities with more equity from shareholders, a measure that would make them less likely to need bailouts (we recommend $1 of equity for each $5 of assets, far more than the 1-to-33 ratio that new global rules require). Another idea is to shock creditors out of complacency by making some of them take losses when banks run into trouble. A third is to prevent banks from using the subsidy to finance speculative trading, the aim of the Volcker rule in the U.S. and financial ring-fencing in the U.K.
Why Should Taxpayers Give Big Banks $83 Billion a Year?,
Originally posted by Kali74
reply to post by MDDoxs
These aren't even bailouts.
They're subsidies we've been giving banks since de-regulation.
They get bailouts on top of this.edit on 22-2-2013 by Kali74 because: (no reason given)
Originally posted by OptimusSubprime
reply to post by Kali74
If it makes you feel any better, the tax payers doing this haven't been born yet. The current tax payers are barely paying the interest on the debt from decades ago. Anyway, we passed the last exit a while back, it's all Monopoly money now. Get your gold and silver while you still can