Bank investors take note. The latest analysis from Bloomberg is suggesting that the profits of major U.S. banks are almost entirely due to taxpayer subsidies. This is something people have suspected for a while, but its coming from a major source makes the allegation somewhat easier to swallow.
On television, in interviews and in meetings with investors, executives of the biggest U.S. banks — notably JPMorgan Chase & Co. Chief Executive Jamie Dimon — make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.
So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
The story is here.