Barclays Estimates ‘Too Big To Fail Subsidy’ Of $2-6 Billion

Barclays PLC (NYSE:BCS) (LON:BARC) estimates the too-big-to-fail subsidy that accrues to systemically important financial institutions at $2 billion to $6 billion per year.

Brian Monteleone and the team at Barclays PLC (NYSE:BCS) (LON:BARC) in their recent credit research report, feel some of the estimates pegging the funding advantage at a high $83 billion are flawed. This astronomical sum is the equivalent of the entire annual profits of these major financial institutions.

In their report, the analysts dwelled deep by estimating TBTF subsidies based on the risk profiles of the moneycenter banks besides adopting...