The Price of Too Big to Fail

Academics figure out the cost of the government’s implicit backing of big banks
Illustration by Erik T. Johnson

In June, Jamie Dimon told a Senate committee that no taxpayer money was “impacted” by this spring’s trading losses at JPMorgan Chase. Dimon, the bank’s chief executive, meant that no one at the Department of the Treasury had to write a check to save the bank. He’s right, and may continue to be right, even after the revelation that the bank’s trading losses might run as high as $9 billion. But checks are not the only thing of value the government can offer a bank.

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