Brewer, Elijah; Jagtiani, Julapa - In: Journal of Financial Services Research 43 (2013) 1, pp. 1-35
This paper estimates the value of the too-big-to-fail (TBTF) subsidy. Using data from the merger boom of 1991–2004, we … that are commonly viewed as the thresholds for being TBTF. We estimate at least $15 billion in added premiums for the eight … markets reacted positively to these TBTF merger deals. Our estimated TBTF subsidy is large enough to create serious concern …