GAO Study Expected to Say Big Banks’ Subsidy Has Shrunk (For Now)
by Donna Borak and Victoria Finkle
A government report detailing the funding advantage the biggest banks receive is likely to be unveiled on July 31, according to sources familiar with the matter. The highly anticipated Government Accountability Office report, requested by Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., is the second part of a study begun last year to ascertain the advantages the largest banks receive due to their perceived “too big to fail” status. Brown is expected to call a Senate Banking subcommittee hearing on July 31, when the report is released to the public for the first time, sources said. The hearing would be the last day Congress is in session before it goes on August recess. Alternatively, Brown or Vitter, as the initial requesters of the report, could put a 30-day hold on the release of the GAO report, but sources consider that unlikely at the moment. Industry observers suggested Treasury Secretary Jack Lew has already given hints of the outcome of the study, noting recent comments he made at two oversight hearings last month where he said the funding advantage has been “definitely dramatically reduced.” “I don’t think he would have said that without the data, but I don’t know the data is from the GAO. There are other places it could have come from,” said Karen Shaw Petrou, a managing partner at Federal Financial Analytics.