IMF Says European Banks Had Up to $300 Billion Subsidy
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Large banks in the euro area benefited from as much as $300 billion in implicit public subsidies four years after the global financial crisis because of investors’ expectations that governments would not let them fail, according to the International Monetary Fund.
The subsidies were reflected in lower funding costs in 2012 for banks including BNP Paribas SA and UniCredit SpA, according to an IMF report published today. In the U.S., the advantage for lenders such as JPMorgan Chase & Co. and Citigroup Inc. was as much as $70 billion, the Washington-based IMF estimated.