New Study: JPMorgan Chase Gets $14 Billion Per Year In Government Subsidies
FILED TO: Politics
From the HuffPost:
At least some of the billions of dollars that JPMorgan Chase lost gambling on credit derivatives once belonged to you.
Last week, Senator Jeff Merkley (D-Ore.) had the gall to spoil the Senate Banking Committee’s gentle grooming of JPMorgan CEO Jamie Dimon by pointing out that his bank would not still be in existence without taxpayer assistance.
Outraged by Merkley’s impunity, Dimon roared that his bank only took the government’s lousy bailout money and only borrowed at rock-bottom interest rates from the Federal Reserve because the government insisted that it do so, for the sake of appearances and the good of the country. And JPMorgan is the country’s greatest hero, so it had no choice but to accept all of this free money the government was handing out. It certainly did not need it.
What Dimon did not say, however, was that JPMorgan Chase continues to get loads of free government money — probably $14 billion per year, according to number-crunching by Bloomberg, based on an International Monetary Fund study.
Bloomberg’s editors write:
The money helps the bank pay big salaries and bonuses. More important, it distorts markets, fueling crises such as the recent subprime-lending disaster and the sovereign-debt debacle that is now threatening to destroy the euro and sink the global economy.Fourteen billion dollars? That’s a lot of cufflinks! The number is based on an IMF estimate of the benefit JPMorgan gets in the bond market from the assumption that the government will make JPMorgan’s creditors whole in the event of another financial catastrophe.
The IMF figures that big banks pay about 0.8 percentage points less in interest to borrow, compared with ordinary mortal banks that have the misfortune of not being too big to fail. That lower interest rate translates into about $76 billion per year for the 18 biggest U.S. banks, Bloomberg writes, of which JPMorgan’s share is $14 billion.
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