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    Why are big banks that are 'too big to fail' able to borrow money at lower cost than smaller firms?

    Also can someone please explain the concept of hidden subsidy in relation to big banks?

    Many thanks!
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    (Original post by StatsGuru)
    Why are big banks that are 'too big to fail' able to borrow money at lower cost than smaller firms?

    Also can someone please explain the concept of hidden subsidy in relation to big banks?

    Many thanks!
    https://www.economicshelp.org/2009/0...g-to-fail.html
    https://www.investopedia.com/terms/t...ig-to-fail.asp

    Because they wont go out of business and offer better security. They also borrow larger amounts.

    Hidden subsidy
    http://www.bbc.co.uk/news/business-12447635

    https://www.ineteconomics.org/perspe...-to-fail-banks

    http://neweconomics.org/2017/01/expo...idden-subsidy/
 
 
 
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