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Bernanke Is in Denial on Too Big to Fail

By Simon Johnson, New York Times - March 1, 2013

In testimony to the Senate Banking Committee this week, Ben Bernanke made a clear statement acknowledging that very large American banks receive implicit subsidies because the market believes they are too big to fail. This was one of the most forthright public statements on this topic by a top Fed official, and Mr. Bernanke should be congratulated for being honest and direct on this important point. 

Unfortunately, when it came to discussing how to bring down this subsidy – and addressing the problem of “too big to fail” financial institutions – Mr. Bernanke’s answers were disappointing.

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