“By limiting the levy to those big four banks that are truly ‘too big to fail’, the levy won’t be passed on to consumers as the big banks will face competition from smaller banks who aren’t paying the levy.”
Brandt says It’s time, however, for the big four banks to pay a ‘fair contribution’ for the public support they receive.
“The big banks get a discount on their wholesale funding because of the ‘too-big-to-fail’ policy of the government. If they went to the wall the taxpayer would bail them out, which means the big four get cheaper funds than their competitors, so the taxpayer should get a fair return for this de facto contribution to big bank profits.”
“The big four banks,” he says “are taking all of the profits while the taxpayers are wearing all of the risk.”