Fed's Fisher says mega banks get "unfair subsidy"
ASPEN, Colorado June 28 |
ASPEN, Colorado June 28 (Reuters) - Large financial firms that have gotten even bigger since the financial crisis earn backdoor government subsidies because of a perception they will be bailed out, a top Federal Reserve official said on Thursday.
This offers these big banks lower borrowing costs and a leg up over smaller competitors, said Dallas Fed President Richard Fisher, who has repeatedly called for breaking up institutions seen as too big to fail.
"It's an unfair subsidy," he said. "They have a funding preference."
While he did not single out specific firms, Fisher was responding to a question about JP Morgan's massive recent trading loss, which is now estimated to range between $4 billion and $6 billion. (Reporting by Jonathan Weber; Writing by Pedro Nicolaci da Costa; Editing by Stacey Joyce)
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