{"database": "press", "table": "releases", "rows": [["https://web.archive.org/web/20140801003930/http://www.vitter.senate.gov/newsroom/press/vitter-and-brown-gao-report-confirms-wall-street-megabanks-receive-taxpayer-funded-advantage-that-widens-at-times-of-crisis-", "Vitter and Brown: GAO Report Confirms Wall Street Megabanks Receive Taxpayer-Funded Advantage that Widens at Times of Crisis", "2014-07-31", "2014", "2014-07", "Republican", "House", "LA", "David Vitter", "V000127", "web.archive.org", null, null, "legacy", "Vitter and Brown: GAO Report Confirms Wall Street Megabanks Receive Taxpayer-Funded Advantage that Widens at Times of Crisis \n\t\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\tThursday, July 31, 2014\n\t\t\t\n\t\t\t\n\t\n\t\t\t\n\t\t\tWASHINGTON, D.C. \u2013 Today, the Government Accountability Office (GAO) released the results of a comprehensive study confirming that Wall Street megabanks have not only received more support from government bailout programs, but enjoy a taxpayer-funded advantage \u2013 over community and regional banks \u2013 that widens during times of economic crisis.\nU.S. Sens. Sherrod Brown (D-OH) and David Vitter (R-LA), who requested the report and are authors of the Terminating Bailouts for Taxpayer Fairness Act (TBTF Act), released the following statement:\n\u201cToday\u2019s report confirms that in times of crisis, the largest megabanks receive an advantage over Main Street financial institutions. Wall Street lobbyists may try to spin that the advantage has lessened. But if the Army Corps of Engineers came out with study that said a levee system works pretty well when it\u2019s sunny \u2013 but couldn\u2019t be trusted in a hurricane \u2013 we would take that as evidence we need to act.\n\u201cWe can fix Too Big to Fail by passing our bipartisan legislation which would ensure that Wall Street megabanks \u2013 instead of taxpayers \u2013 have adequate capital to cover their losses in a crisis.\u201d\nBrown and Vitter requested the report in 2013. A copy of their letter to GAO can be found: HERE.\nGAO\u2019s study examined size-based funding costs by comparing fixed-rate senior unsecured bonds issued by banks holding companies (BHCs) from 2006 through 2013. GAO used 16 studies that met certain criteria for relevance and rigorousness.\nRather than provide definitive numbers of a basis point (bp) funding advantage and an associated dollar figure, GAO provided the full range of findings based upon the different variables the report utilized.\nGAO found that while funding cost differences may have declined or reversed in recent years, this change may be due to improvements in bank holding companies\u2019 financial conditions and low borrowing costs. Implied in GAO\u2019s analysis is that investors view all institutions as being relatively safe because of the nature of the current financial sector. The report suggests that under more normalized credit conditions, or if there was another crisis tomorrow, investors would flock to the institutions that they believe are Too Big to Fail. Further, the report confirms that the advantages Wall Street megabanks enjoy today would be roughly the same as they enjoyed back in 2008, suggesting that little progress has been made in addressing Too Big to Fail.\nTo supplement its empirical work, GAO also sought anecdotal evidence from market participants, including investment firms, pension funds, and insurance companies that invest in banks, and non-financial corporate bank clients. The GAO met with six corporate treasurers, all arranged through the U.S. Chamber of Commerce. These conversations found that some large corporations look at potential government support as one of the criteria used in determining which institutions with which they transact, but some do not. At least two corporate treasurers do believe that large banks will be bailed out in the future \u2013 a factor that surely influences their financial decisions. Finally, another corporation noted that support can indirectly influence its decision making through the credit rating \u201cuplift.\u201d\nThe nation\u2019s largest Wall Street banks enjoy an implicit guarantee\u2014funded by taxpayers and awarded by virtue of their size\u2014as the market knows that these institutions have been deemed Too Big to Fail. This allows the nation\u2019s largest megabanks to borrow at a lower rate than regional banks, community banks, and credit unions. This funding advantage, which has been confirmed by three independent studies in the last year, is estimated to be as high as $83 billion per year according to Bloomberg.\nBrown-Vitter, or the Terminating Bailouts for Taxpayer Fairness Act (TBTF Act), would ensure that financial institutions have adequate capital to protect against losses. Specifically, the TBTF Act would:\n\u2022 Set reasonable capital standards that would vary depending on the size and complexity of the institution;  \u2022 Limit the government safety net to traditional banking operations; and  \u2022 Provide regulatory relief for community banks. Provide regulatory relief for community banks.", 1, "2026-03-30T12:14:52Z", "2026-03-30T12:14:52Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://web.archive.org/web/20140801003930/http://www.vitter.senate.gov/newsroom/press/vitter-and-brown-gao-report-confirms-wall-street-megabanks-receive-taxpayer-funded-advantage-that-widens-at-times-of-crisis-"], "units": {}, "query_ms": 1.990495715290308, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}