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Too Big to Fail


Bye-Bye, Bad Loans, Hello Big Bank Stocks

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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Create your own customizable basket of up to 30 stocks or ETFs for just $9.95.
Motif Index 1 YR Return
Too Big to Fail Benchmark
With this Motif, you can buy the following basket of stocks for just $9.95:
Weight Segment & Stocks Symbol 1 MO / 1 YR Return
52.4% Retail Banks 7.4%
19.0% Wells Fargo & Co. WFC 10.0%
12.9% U.S. Bancorp (DE) USB 1.6%
6.5% Capital One Financial Corp COF 14.0%
5.8% PNC Financial Services PNC 5.0%
4.1% BB&T Corporation BBT 8.9%
1.1% SunTrust Banks Inc. STI 1.9%
1.0% Regions Financial Corp RF 4.6%
1.0% Fifth Third Bancorp (Cincinnati OH) FITB 8.8%
1.0% KeyCorp KEY 13.8%
30.7% Financial Conglomerates 7.2%
17.4% JP Morgan Chase & Co. JPM 0.7%
5.3% American Express Co. AXP 19.4%
4.9% Bank of America Corp. BAC 11.2%
3.2% Citigroup Inc C 16.5%
8.8% Investment Banks 24.7%
6.3% The Goldman Sachs Group Inc. GS 23.6%
2.5% Morgan Stanley MS 27.6%
6.1% Custodian Banks 9.5%
4.0% The Bank of New York Mellon Corp. BK 4.1%
2.2% State Street Corporation STT 19.5%
2.0% Insurance Providers 7.1%
1.0% American International Group Inc AIG 2.2%
0.9% MetLife Inc MET 12.6%

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