"... The figure was the size of the subsidy that taxpayers give to British banking just by virtue of being available to bail out banks if things go badly wrong. It was calculated by working out the value to banks of the difference between the two ratings now typically given to them by credit rating agencies: one of the ratings takes likely government support into account; the other, lower rating does not.
The Bank put the figure for 2009 at £107 billion....
There’s nothing specific to the UK about the subsidy, other than its size relative to the UK economy... The financial news service Bloomberg, drawing on work by the International Monetary Fund, estimates the US subsidy at $83 billion a year...
... it is reasonable to ask whether an activity such as banking, in which participants can become enormously wealthy, should receive a subsidy on this scale.
At least as important is the way in which the subsidy generates a systemic economic effect with huge consequences for the behaviour of the banking sector..."
The Bank put the figure for 2009 at £107 billion....
There’s nothing specific to the UK about the subsidy, other than its size relative to the UK economy... The financial news service Bloomberg, drawing on work by the International Monetary Fund, estimates the US subsidy at $83 billion a year...
... it is reasonable to ask whether an activity such as banking, in which participants can become enormously wealthy, should receive a subsidy on this scale.
At least as important is the way in which the subsidy generates a systemic economic effect with huge consequences for the behaviour of the banking sector..."
http://www.lrb.co.uk/v35/n09/donald-m...