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.
On June 28, Richard Fisher, president of the Dallas Federal Reserve, said that the markets assume larger banks are too big to let fail. That much we knew. Five banks—JPMorgan, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs—held more than $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve.