One outcome of the TARP and other bank rescue efforts following the collapse of Lehman Brothers in September of 2008 is that the United States has essentially formalized a commitment to a “too big to fail” (TBTF) policy for major banks. This paper uses data from the Federal Deposit Insurance Corporation (FDIC) on the relative cost of funds for TBTF banks and other banks, before and after the crisis, to quantify the value of the government protection provided by the TBTF policy.
BY DEAN BAKER AND TRAVIS MCARTHUR*
http://www.cepr.net/documents/publications/too-big-to-fail-2009-09.pdf
More invaluable advice from Robert A. G. Monks, analyzing the new breed of dysfunctional “drone corporations.” He calls out the most influential trustees of pension funds, endowments, and foundations by name to take responsibility. A must read by asset managers and trustees worldwide.