Too Big to Fail? You Have No Idea

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Saying that a bank is too big to fail has become a cliche.

What does it mean? How big are we talkin'?

When most analysts and investors discuss the concept of too big to fail, they're referring to the quantity of balance sheet assets. Take Citigroup , ostensibly the nation's third largest bank by assets. Its balance sheet boasts a staggering $1.9 trillion in assets -- yes, that's trillion with a "t." Bank of America , the nation's second largest lender, reports $2.2 trillion in assets. And JPMorgan Chase , the biggest of them all, has nearly $2.4 trillion in balance sheet assets.


That's pretty massive, eh?

Well, what if I were to tell you that this is only the start of it? What if these banks grew to control, say, $10 trillion in assets? Or $20 trillion? Would that concern you?

I hope not, because that indeed is already the case. As the following infographic illustrates, once the nation's largest banks account for assets under management and custody, their size swells more than tenfold.

Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

The article Too Big to Fail? You Have No Idea originally appeared on Fool.com.

John Maxfield owns shares of Bank of America. The Motley Fool owns shares of Bank of America, Citigroup, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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