Too Big to Fail
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Too Big to Fail


Bailout Can Make Big Banks Bigger

Sometimes, size really does matter. During the financial crisis the US government declared that 19 financial institutions were systemically important, or “too big to fail.” And they backed it up with the $700B Troubled Assets Relief Program (TARP). As a result, those 19 institutions can now benefit from a view that they have an implicit US Government guarantee. That perception lowers their risk profile and borrowing costs, delivering an immediate implied subsidy of as much as $83 billion a year.[1] The six largest banks control 67% of all U.S. banking assets, and Bank of America accounted for about a third of all business loans by itself last year. If these institutions were “too big to fail” back in 2008, then now they may be “too colossal to collapse.” And that could be a gigantic advantage. See more
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Motif Index 1 YR Return
Too Big to Fail Benchmark
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Weight Segment & Stocks Symbol 1 MO / 1 YR Return
39.9% Retail Banks 7.6%
15.8% Wells Fargo & Co. WFC 10.7%
9.2% U.S. Bancorp USB 3.2%
4.8% PNC Financial Services PNC 10.9%
3.1% BB&T Corporation BBT 4.6%
2.7% Capital One Financial Corp. COF 7.4%
1.6% KeyCorp KEY 7.3%
1.0% SunTrust Banks Inc. STI 10.6%
0.9% Fifth Third Bancorp FITB 0.3%
0.9% Regions Financial Corp. RF 2.0%
29.7% Financial Conglomerates 11.2%
14.0% JP Morgan Chase & Co. JPM 21.7%
7.4% Bank of America Corp. BAC 8.8%
5.1% American Express Co. AXP 16.6%
3.2% Citigroup Inc. C 15.5%
14.3% Investment Banks 25.2%
9.8% The Goldman Sachs Group Inc. GS 26.9%
4.5% Morgan Stanley MS 21.6%
11.0% Custodian Banks 13.5%
8.6% The Bank of New York Mellon Corp. BK 13.1%
2.4% State Street Corp. STT 14.9%
5.0% Insurance Providers 11.4%
4.1% American International Group Inc. AIG 13.4%
1.0% MetLife Inc. MET 2.9%