As new financial regulations intended to combat TBTF take effect, ongoing measurements of TBTF funding cost advantages can serve as a scorecard for financial reform efforts to date, and a useful indicator of whether alternative reforms may be needed to succeed in the battle against TBTF.
This working paper describes one result from a broader effort to review and update the empirical evidence of TBTF among US banking institutions. Our aim is to build on the most promising research on funding costs to develop a robust view of TBTF perceptions using the latest available information.
This study was sponsored by The Clearing House Association. All findings and recommendations are solely our own.