period equityholders in big banks paid fairly for TBTF bailout insurance in terms of equity returns. In normal (non …-crisis) periods, after TBTF in 1984, big banks pay an “insurance fee” for protection against severe losses in a crisis accepting a … higher net regulatory burden reflected in a -9% per annum lower equity return relative to small banks. Moreover, a measure of …

to prevent banks from failing and restore confidence in the banking system. Indeed it is true that the tools were used … illiquidity and insolvency. One reason is that in both periods guarantees were created and used to protect bank customers …, ensuring liquidity and restoring confidence in banks. Furthermore, in both periods, the banking system was recapitalized …

in market structure: consolidation among insured banks, and growth among bank holding companies (BHCs). Our analysis uses …