The Value for Banks of Being Too Big to Fail

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In the video below, Fool contributor John Reeves takes a look at just how valuable it could be for the biggest banks in America to be considered "too big to fail."

John compares different studies arguing for and against the idea that just being viewed as too big to fail means banks can borrow at artificially low interest rates, which results in a de facto subsidy worth billions. John suggests that this is an effect big banks are looking to downplay. Could this effect actually be worth billions to the biggest banks, such as Bank of America , JPMorgan , and Citigroup ?

Citigroup's stock looks tantalizingly cheap. Yet the bank's balance sheet is still in need of more repair, and CEO Michael Corbat still needs to prove himself. Should investors be treading carefully, or jumping on an opportunity to buy? To help figure out whether Citigroup deserves a spot in your portfolio, I invite you to read our premium research report on the bank today. We'll fill you in on both reasons to buy and reasons to sell Citigroup, and what areas Citigroup investors need to watch going forward. Click here now for instant access to our best expert's take on Citigroup.

The article The Value for Banks of Being Too Big to Fail originally appeared on

John Reeves has no position in any stocks mentioned. 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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