According to a number of studies from the NY Federal Reserve, the largest banks in the U.S. continue to benefit from the perception that they are lower risk than smaller banks, giving them the ability to borrow at a lower rate. This perception of reduced lending risk with banks such as Bank of America (BAC -1.07%) and JPMorgan (JPM 0.15%) seems to come from the idea that were another catastrophic collapse to occur, these institutions are still considered "too big to fail," and would receive another government bailout.
In this segment of last week's Where the Money Is, Motley Fool banking analysts Matt Koppenheffer and David Hanson look at the studies, and discuss what the idea of "too big to fail" means today.
